Business Case Report

Langdon Morris
We have a hard stop at 2:00PM because there will be a press conference by phone at 3:00. So we will do the reports in order because there seems to be a logical flow to it, starting with the executive summary and going to the detailed timeline. Questions are for clarification only.

Team One
Executive Summary
Assignment
Report

Kimberly Wiefling
Jim Grady
Dan Rasky
Cheryl Nickerson
Ryan Ishizu
Louis Stodieck
Team Two
Communications
Assignment
Report

John Spencer
Bob Ford
Wendy Dolci
Kevin Foley
Bev Girten
Richard Mains
Mark Flynn
Team Three
NASA
Assignment
Report

Jeff Belanger
Allen Marty
Joe Casas
Keith Robinson
Francine Gordon
David Johnson
Ken Cox
Chris Maese
Rudy Aquilina
Dan Bland

 
Team Four
User Coalition
Assignment
Report

Lynn Harper
Nils Sedano
Kathleen Connell
Mike Krihak
Perry Mistry
John Hines
Allen Wilkinson
Petter Kleppan

Team Five
Risk Analysis
Assignment
Report

Martin Butterick
Bruce Pittman
Stephen Voels
Team Six
Business Case
Assignment
Report

Bard Johansen
Chris Von Wilpert
David Anderman
Phil Smith
Rene Fradet
Kyle Wiskerchen
Henry Hertzfeld
Neil Love
Team Seven
Technical Case
Assignment
Report

Ron Schaefer
Allison Zuniga
Hank Murdock
G. Ramesh
P. Todd
Team Eight
Implementation Plan
Assignment
Report

Steven Gonzalez
Mike Wiskerchen
Forrest Hetherington
Jeff Iverson
Tom Taylor
Stan Farkas
George Sarver
James Bailey
Cathy Kramer

 

Team One Assignment - Executive Summary
In relation to a new entrepreneurial paradigm for biotech on the ISS:

Team One Report

We worked on the Executive Summary. The bottom line is the vision. Our vision was: The international ISS is a unique laboratory that the bitoech industry utilizes to develop innovative commercial products that significantly enhance human health.

We started with NASA providing the proof-of-concept. NASA will have to invest on the front end to support the research that could identify targets for drug development that could help with cancer and immune dysfunction.

If that's achieved then the biotech industry will come on board. We will have to reach out to education and industry to get them on board with NASA. We have to work together and create a consortium. Other things we need are, reliable and frequent up-down, on-orbit infrastructure, and a user friendly front end to the infrastructure. That leads to high throughput and the ability to do research rapidly and that's what the private sector needs.

Another thing is we have to crate an organization outside of NASA to implement this. NASA has too many conflicting priorities to focus and do this. The independent organization has to be able to advocate independent of other priorities.

We have to clarify the evidence. We talked about that yesterday.

Then we talked about the customer-centric, friendly system. We have to be responsive to the customers' needs. This has to be customer driven. They have to be the ones to establish the requirements and we facilitate that. We have to be encouraging and can do.

A key question that remains is, can NASA accommodate all of the above? I think it can if we create the organization outside of NASA that runs this. Then there's still the question of international partners. That's it.

Team Two Assignment - Communications
 If this project of a new entrepreneurial paradigm for biotech on the ISS is to be successful, we must engage a large number of people (beginning with Mike Griffin) and convince them that it is at least plausible.

Team Two Report

We worked on communication. We have a short story here. Here are the headlines we imagined. ISS Accelerates health and wealth! Private sector embraces ISS for wealth and 21st century benefits! Then we created a matrix. There are various audiences we have to tailor the message to. To NASA and Mike Griffin, it's the message we came into with this workshop with. This concept will repair the credibility of NASA and opens the door for commercialization of LEO. We need to show that there will be long term cost savings. For ISS partners we want to strengthen them and align them. To the public, this research will be relevant to human health, stimulate the economy, and give the US a competitive edge. To Congress, the mess will be that this will help create jobs and support national leadership.

We divided the private sector. To biotech the message will be that this concept will accelerate new product development. To the venture capitalists community we want to promote homerun opportunities. And to aerospace we want to promote the idea of new opportunities. The message to academia will be that frequent access will lead to new discoveries.

Then we talked about various media types that can be created to help get the message out. A 30 second promotional trailer would be nice, perhaps on NASA TV. We will also have a website for this. Perhaps we could do webcast from ISS. Hopefully, peer review journals is happening in parallel.

Feedback would be working with groups like regional conferences and videos and town meetings with the key partners.

How do we push the story? Have the right people tell it, people like Scott Hubbard. We'll need broad industry support. Ames has to take a major role in this. The private sector has to take part in this too. We need an Advocacy coalition forum too.

Team Three Assignment - NASA
For a new entrepreneurial paradigm for biotech on the ISS to be implemented, NASA will have to change.

Team Three Report

Our task was to take on the role of NASA and the government. We started by looking at end-state commercial space-based biotech research. The first phase is driving to the destination. We need to enable biotech research in space. There are two things we considered upfront. First, we need to validate this and make sure this is technically sound. The second thing we need is to make is that we have a sound business case as well.

How do you show the science in collaboration with the biotech industry? We have to do studies, and do journals. Then you show the business case and help industry along. We have to accelerate the ongoing process.

Then we move to the second phase: what's the Government role? It has to be a minimum role. Government can give money for grants.

From an entrepreneur research science viewpoint, what does NASA have to do?. First, NASA has to cease being program-centric and become service-centric. NASA is under federal regulation 15 and NASA has to move beyond that. NASA has to think of the customer as number one. Peer review is fine, but only if the customer ask for it. There's also a notion of no peer reviews?

The next question was NASA's role versus others. NASA needs to provide career astronauts, and research facilities have to be available. The biotech companies would define their own payloads. Mission success criteria should be defined by the researchers. RPCs need to be unconstrained.

There needs to be more business-to-business relationships.

In my mind, NASA needs to become a benevolent dictator. Then we took a look at next steps. We have to answer some fundamental questions like: what is the ISS? what are they building? how big will it have to be? We're still designing the space station 20 years after it was started. Why not designate the ISS as a RPC.

My group looked at the customer-centric ISS. This graphic here shows NASA today, it's sort of a maze. There are barriers to entry and exit. In the future NASA needs to be simplified internally. We're proposing that NASA become a landlord -- just owning ISS, not running it. In our model NASA will be a property manager. They will work with NASA and develop a clear set of requirements. The emphasis on interface is safety. NASA should become a facilitator with customer advocates. The reps will help find the rangers. There might be subspecialties involved, like plants or cancer researchers, then they schedule the payload and make sure they meet the speed demands.

Do we limit the types of study that happen on ISS? Maybe we do. We could have expedited orders like FedEx. We need a way of dealing with emergencies like pandemics.

Team Four Assignment - User Coalition
For this entrepreneurial scenario for biotech on ISS to come about, numerous firms, universities, agencies, and even nations will play a role.

Suppose there was a “User Coalition” or “User Group” consisting of the various groups that have a stake in the entrepreneurial ISS. Please design that User Coalition.

For example,

Team Four Report

Our task was to identify the users that will join ISS. Anybody can join. The normal setup is international and NASA, but we identified universities, research entrepreneurs, tech societies, and launch industries. The launch industry will play a vital part in bringing up the payloads.

How should this be organized? This model shows that this is the primary facilitator. Companies that wish to have research done will come to the facilitator and set up all the detail that they used to do at NASA. And they could get quick answers. This organization would run it.

So you have a partnership, and a body of directors that works with the international members and NASA. It's authority is assigning the time slots. It interfaces with NASA in a cooperative agreement -- that's what we had in the beginning. As it grows it will become a for-profit group.

Then we listed our next steps. As it grows to for-profit, the infrastructure becomes less of the cost in Government's share. NASA itself will eventually leave this alone.

The timeline is a key question. When can this be initiated? It has to be analyzed.

Team Five Assignment - Risk Analysis
Supposing this scenario of a new entrepreneurial paradigm for biotech on the ISS goes forward to implementation:

Team Five Report

We assessed the risks and opportunities.

From a risk perspective, this should be broken down into different groups, investors, NASA, and society.

The risks for the investor is that there could be loss of investment and time. The risks for NASA is that it could lose up front investment, damage to their reputation, and loss of control. For science the biggest risk is wasting resources. The societal risks is wasting taxpayer's money and a loss of faith.

The risk of not doing this had some of the same risk of doing it. If you don't do it, there's many opportunities that can be lost : NASA could lose its reputation. From the science standpoint there could be a delay in breakthroughs. For society, there's a loss of potential things that could benefit humanity. And from a US perspective, if this is done by others, then the US loses revenue.

Then we looked at what the various entities will have to give up. Investors might have to give up other opportunities to get involved in this. NASA will have to give up control. Science will end up giving up flight opportunities for fundamental science to do commercial research.

What are the opportunities available? For the investor that's an easy one: big money. What NASA gets is an exit strategy from ISS. Science can achieve major breakthroughs. And society can improve its quality of life.

This graph on the wall shows time. The red shows we're evaluating red and investment is depicted as green. Over time you see the private investor will feel more comfortable investing in ISS. Risk will go down and there will be a real belief in a possible homerun. Then more investment will pour in and risk will continue go down. The remaining questions are: at what risk level do we reach the tipping point? how much financing will NASA have to put in to reach the tipping point? and how can society reach a balance between fundamental and commercial science?

Team Six Assignment - Business Case
Build the business case for a new entrepreneurial paradigm for biotech on the ISS.

Team Six Report

Our task was to develop the business case for biotech on ISS. We started by looking at who are the customers? We decided that the primary customers would be pharmaceutical, agriculture, universities, R&D, and perhaps government . agencies. We also included possible international customers.

Then we looked at the customers' needs. We need a user friendly ISS interface. They need crew time and access to knowledge results.

Then we asked how could we meet their needs? Simply put, we think there needs to be a one stop shop. It has to be a centralized thing that reduces confusion.

The there's the price issue. Initially, the price will be proportional to expected revenues.

Our other question was what organizations could help us address this? We thought launch companies and cargo companies would be key.

We looked a potential competitors and we thought some of them might be organizations like, NASA, RSC Energia, ESA, JAXA, and others.

Then we looked at next steps? 1) We will need to quantify the value to biotech. This is about creating a customer friendly infrastructure. 2) Then we decided we had to determine the intermediary that everyone is talking about. 3) We need to work out the numbers 4) We need to assess all the risk aspects.

What's the unanswered question? Lethal barriers.

This is our business model. The intermediary is in the center. Biotech is the customer at the top. The supporting players are at the base.

Coming from real estate and offshore production background I said this is like an oil vessel. This is similar to that analogy of oil discovery, refinement, and delivery. In this graphic you see the process plant, laboratory, and operations. The captain steers the ship. The process plant is the laboratory real estate. Researchers rent out the lab. Then we have the door on our illustration, it's where you drop off your deliveries.

One comment. Our discussion was not as clear as the presentation. Who are you trying to make the business case for? It's important to look at this from different perspectives like, investors, scientists, and NASA.

Team Seven Assignment - Technical Case
In the context of a new entrepreneurial paradigm for biotech on the ISS, prepare a table showing the technical options for:

Draw the graph that shows the ratio between frequency of flight and cost of flight

Your table should include the following:

Team Seven Report

Our task was to build the tech case for space infrastructure. We broke the infrastructure down into, launch services, cargo delivery, crew, and return and group operations. We also talked about on-orbit processes.

Under launch we put down a whole list of potential launch companies like, STS, Atlas, Delta, Kistler, etc. There are different types of launch companies at different maturity levels. Typically the more mature companies cost more than newer companies such as SpaceX. The more mature companies cost about $5 M a launch. The less mature ones cut that cost considerably. We have to look at lowering the cost of the launch services to help finance and build the commercial paradigm.

Some of the companies were cargo delivery organizations. Here we listed things like the Shuttle, Progress, ATV, etc.

There are may ways to do returns like SPEED, Raduga, and Soyuz.

We put together a graph about the cost of launch vehicles. You'll notice that the cost comes down with frequency of launches. If you can get something like Atlas down to 12 flights per year you can cut cost from $100M to around $20M.

Team Eight Assignment - Implementation Plan
Suppose that Mike Griffin approves this concept of a new entrepreneurial paradigm for biotech on the ISS within the next 30 days.

Team Eight Report


We came up with the implementation plan. The first significant thing after this workshop is the report to Mr. Griffin July 5. That will include the recommendations from this workshop.

Then we have until September to come up with a feasibility study for the implementation plan. We'll have to ask who are the major players and how we will work together. We were working with the assumption that Mike will adopt this and that the mission formation will be complete with a budget commitment around March of 2007. When the groups come back to the table they need to decide if they want to do this. Are we going to put the money down? By September of 2007 we need a demonstration of the operations, lab facilities, and processes. We want to prove we can fly and get your data back to you safe and timely. This is where a lot of confidence will be gained. By October we will have a need a down-mass capability demonstration. After that you have the independent commercial launch, which probably is a US vehicle docking at ISS. Between December 2007 and 2008 you will see regular increases in flights and a decrease in risks. By 2009 we should have achieved our first homerun at 12 flights per year.

Langdon Morris
I want you to think about six or nine months ago, if someone said we would be building a business case for ISS, would you have believed it? Probably not. Just four weeks ago Mike Griffin set up this workshop. How does it feel?

It feels good.

Lynn Harper
How many people here were familiar with the biotech case before you came? This was new to a lot of people. Are you comfortable with what we're doing. The case looks good. We know that the way were going about scientific research on ISS now will not lead to benefits to the well-being of humanity as quickly as we need them to. That's why we need a new strategy. Any questions?

Questions

I think using ISS will be difficult. I think free-flyers are more the way to go.

Lynn Harper
There's more than one way to look at this, and obviously there's more work to do. We'll take a look at that in phase 2. I think from a biological perspective you will need a person in the loop, a trained scientist or payload specialists.

But a lot of it could be done without people. The man in the loop could be on the ground. At least for some types of research.

The third piece to look at is, how will frequency have an impact on the commercial industry. If we went from four logistic launches to 12 we will create an enormous opportunity for the launch community.

Would you recommend this to the administration?

Definitely.

I never looked at space as a business opportunity. I came here looking for a way for my company to capitalize on new opportunities. There's a lot of enormous opportunity that we're African-Americans and other minorities are not a part of. As I look at a five or ten year plan I know enough people that can develop a company that will compete with the top dogs. I think this has been so beneficial that I can't thank you all enough for allowing me to be a part of this.

Scott Hubbard
I would like to thank you all for coming. As you know, this idea was previewed to the administrator just about a month ago. The work that you did here will go into a report for Mike Griffin on July 5. Mike totally understands what you've recommended here and he supports it fully. All the themes are there. The administrator understands that this isn't about Government hiring a prime contractor, it's about the biotech and launch industry having their own skin in the game. Mike truly understands this. I can't thank you enough for coming in and being willing to participate in this. I think we will look back at this ten years from now and say, "I was there when this came about." Thanks again.

Langdon Morris
I just want to make one final comment. We have pioneers in the room from the Apollo days, to the Shuttle days, and future pioneers from commercialization of space days. That's pretty special. We have three generations of pioneers in the room. Thank you all for coming.