May 31, 2023

Revealed: The secret notes of Blue Origin leaders trying to catch SpaceX

Revealed: The secret notes of Blue Origin leaders trying to catch SpaceX
Revealed: The secret notes of Blue Origin leaders trying to catch SpaceXRevealed: The secret notes of Blue Origin leaders trying to catch SpaceX
Revealed: The secret notes of Blue Origin leaders trying to catch SpaceX
Aurich Lawson | Getty Images

About three years ago, Blue Origin officials knew they were behind, failing to deliver on their founder’s grandiose vision.

With Blue Origin, Jeff Bezos had long talked about building a world-class space transportation company and had even gone so far as to trademark “Build a Road to Space.” But despite being nearly two decades old, Blue Origin had not built a road to space, nor even launched an orbital rocket.

Meanwhile, the rocket company founded by Bezos’ rival, Elon Musk, had establishing itself as the most dominant launch company in the world. By the fall of 2018, SpaceX was well on its way to launching a record 21 rockets in a single year, had debuted the Falcon Heavy, and was starting to seriously reuse first stage boosters.

“Blue is kind of lazy compared to SpaceX,” one Blue Origin executive admitted in an internal memo in late 2018.

These were not easy facts for Blue Origin’s leadership to contemplate. But they realized that if Blue Origin was going to become a great launch company, it should learn from the best. So in the late summer of 2018, as Bob Smith marked his first anniversary as chief executive of Blue Origin, he hired a management consulting firm called Avascent to assess SpaceX’s strengths and weaknesses.

After the firm completed its analysis, the senior leadership team at Blue Origin received a briefing. Those dozen or so senior managers took notes. And as part of the exercise, they wrote down takeaways from the meeting as well as ideas for Blue Origin to better compete with SpaceX. These nine pages of notes were then compiled and delivered to Smith on Nov. 1, 2018, under the heading: “Avascent Briefing Notes from Senior Team.”

First page of memo to Bob Smith in November, 2018.
Enlarge / First page of memo to Bob Smith in November, 2018.
Leaked Blue Origin memo

Ars recently obtained screenshots of these notes. They offer a frank, revealing portrait of Blue Origin’s struggles to compete with SpaceX at the time, and the efforts executives considered undertaking to catch up. In hindsight, they also underscore Blue Origin’s failure to address some of these deficiencies. Nearly three years later, SpaceX is a bigger market leader than it was in 2018, with Blue Origin lagging further behind, its road to space yet unpaved.

Each section of the story below describes an area that Avascent identified as a strength at SpaceX and highlights comments from senior leaders responding to that strength—or identifying ways Blue Origin could improve. (Material appearing in parentheses was added by Ars for clarification.) Because the comments are candid, and made in private, Ars will not publish the notes in full, nor attach names to individual comments.

Customer focus

The consultants identified SpaceX as having a strong emphasis on satisfying customers, seeking to provide desirable services at a lower cost.

“They have a customer focus,” a Blue Origin executive wrote in response. “We should too. In many cases we view the customer as a nuisance. This is the case with LSA (Launch Services Agreement, or the US Space Force), satellite launch for NG (satellite customers for the New Glenn rocket), and astronauts for NS (New Shepard). We need to change this culture.”

Avascent noted that the Falcon 9 rocket, during the 2010s, had captured a large share of the market to launch satellites to geostationary orbit. SpaceX did this by pricing its Falcon 9 rocket about 50 percent below the market leader in this area, the European launch company Arianespace and its Ariane 5 rocket.

One example demonstrated how important price was to customers. Before the mid-2010s, the Falcon 9 booster had significantly lower performance than the Ariane 5 rocket. Therefore, the Falcon 9 had to inject satellites into a “transfer” orbit rather than boosting them all the way to geostationary space. In response to this, satellite companies increased the performance of their satellites’ on-board propulsion. This allowed satellite operators to book a cheaper launch on the Falcon 9 rocket and shift more responsibility to the satellite’s electric propulsion for orbit raising.

Several Blue Origin executives wondered what this might mean for their own company’s powerful New Glenn rocket and its potential satellite customers. Unlike the Falcon 9, New Glenn has significantly greater performance than the existing geostationary satellite market demands. Was this design decision, they asked, responsive to customer demand?

“SpaceX shifted the market to their payload capabilities and risk profile with their low-cost launches,” one person wrote. “Blue has pushed to exceed the market’s current capabilities for size and mass. While this enables us to give our potential customers more design freedom, will they really try to design to a size or mass that makes our vehicle the only vehicle that can launch their payload? How confident are we that the market will design to our capabilities?”