It's quite amazing how this values SpaceX at 10bn, less than 50% of WhatsApp. This makes me think that there's something systemically wrong with the current incarnation of post-oligarchic shareholder-controlled short term interest based capitalism. One can argue that WhatsApp has better money making potential than SpaceX, but that is only because the whole system is warped.
While I see your point, I think there are two important things to remember here. (Note: I understand the long term implications of an interplanetary species, just providing context)
A) whatsapp improves the daily lives of hundreds of millions of people. You don't necessarily need an absurd customer lifetime value to get a $19b valuation with that many people using your product.
B) SpaceX provides almost no current value to anybody. And the people it does provide value to are "free riders" in the sense that they love watching space travel and get to watch SpaceX regardless of whether or not they pay for it.
Just an inexact thought experiment. Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10?
WhatsApp is a consumer product. It lives as it breathes. As long as people/consumer keeps pumping in money & time to it, its value will stay or rise from its current value. Once that stops and people/consumer stop using it, its value will eventually fall.
SpaceX on the other hand is not a consumer product yet, but is aiming to become one. Consider it just like Boeing or AirBus, nobody would have valued them as a multi-billionaire company ( back in 1900s when they were founded). Their technological advancements and the development phase would have been same as SpaceX right now.
But eventually it became a very integral part of human life. They have become a consumer product, their value is now because of people using it daily. And unlike WhatsApp people won't stop using air-travel.
Everyday people do not invest directly into it like they do(?) for WhatsApp, but indirectly by using airline services they are paying for it. Similarly for SpaceX everyday people aren't investing in it right now but eventually ( as per SpaceX's ambition ) people would just like they are doing for air-travel.
SpaceX comes with, well, an astronomical (snicker) level of risk attached to it. So I suppose the idea is that SpaceX might well end up being worth a lot more than WhatsApp, but WhatsApp and its user base are worth a lot now. It is also unlikely that they will end up not being worth anything in the future (if we hit a second dotcom bubble WhatsApp might end up being worth a lot less than their current valuation, but like AOL, it won't be literally worth nothing). SpaceX might.
There is also some level of tragedy of the commons problem going on, in which SpaceX benefits all of us every time they successfully test a new design, but it only benefits their investors when they manage to get mining rights to the moon or set up martian tourism or the like. Goals which are possible - which is the impressive thing - but still very risky bets.
SpaceX is in an industry with better financed/politically connected companies and an unpredictable revenue stream. It's a risky business by every definition. WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform.
And if you think that human-human communication is less valuable than putting a few satellites in space (NASA/ESA/ISRO/etc are the real keys to future space exploration) then I would argue your priorities are a bit warped.
I'm surprised it is the top comment. If I remember correctly, it has been discussed a lot of times on HN. And most of the times, people agreed it wasn't a fair comparison.
I think WhatsApp potential value caps out at 50B or so. SpaceX potential value might be in the trillions (low probability). So while their current valuations might seem 'wrong', the long term potential value might be closer to your value judgement. There are very few large investors with a 20 year time horizon. I am not sure if that is a fault of capitalism. I am not sure another system of resource allocation would do better, do you?
This has nothing to do with short term interest based capitalism. Whether privately held, a charity, or any other structure, if what you are making is not of general interest to the population at large, it's going to have a pretty hard time. The only way to fix that is to eliminate free markets and democracy so people of average or less intelligence/foresight have no say in the appropriation of resources.
SpaceX is the commercialisation of space exploration and that's just how valuation works in commercial applications. It is, however, remiss to value to science and progress in dollar terms. TCP/IP is far more valuable than all of the Internet companies combined but not in dollar terms.
That's similar to saying a toddler is less productive than a recent college graduate.
That is to say: WhatsApp is much further along its individual trajectory than SpaceX is. In decades, the value of SpaceX is likely to eclipse WhatsApp, which in all likelihood won't even exist any longer.
My guess is that a part of the issue is that VCs can understand WhatsApp. They feel like that can assess it's worth, associated risk, and come up with a valuation independently.
With science based startups the partner at a VC can't easily make an independent assessment. They have to rely on specialists to do tech D&D and they rarely trust them completely. So they shy away from those deals, or they factor the risk into their valuations.
This behavior somewhat ironically can make these investments higher risk. There is a degree to which fund raising at a lower level makes a company a higher risk, because they have less money to work with and can't afford to make mistakes. (the converse is also somewhat true).
Perhaps it's partly because space is seen as higher-risk than social media? The valuation would then be lower because people lower their expectations based on the risk of failure.
Having just finished watching The Men Who Built America[1], Musk reminds me so much of the great American entrepreneurs of the last 200 years (Vanderbilt, Rockefeller, Morgan, Ford, Carnegie). Ridiculously ambitious and fearless entrepreneurs who literally by sheer force of will moved humanity forward.
I've been wondering if part of this SpaceX satellite gambit is to help Tesla Motors. Think about it: if and when there are 500,000 or a million or several million Tesla vehicles (including the Model 3) all over the world, plus thousands of SuperChargers, and they all need to be connected to the Net for messaging and value-added services, then what better way than to just have 'em connect to the SpaceX service?
Right now Tesla Model S vehicles connect via AT&T (at least in the US, don't know what the carriers are in other countries). It's a tiny number of "devices" connected to the network so it is probably expensive for Tesla. At some point it gets really expensive. One assumes the Model 3 will have the same always-on connection that the Model S/X has. Millions of Models S/X/3 around the world mean a lot of communications costs. And then there are the SuperChargers, that will in time no doubt be communicating with cars too, to improve the user experience.
I suspect a few million "devices" connected to the SpaceX version of global wifi would be way cheaper than connecting to a dozen or two carriers in countries around the world.
Makes me wish average joe could buy spacex stock. Willing investors shouldnt have to be elite or accredited. Just believers and supporters of a better future.
Most companies that raise money by other means than publicly trading stock frankly don't want the head ache of dealing with shareholders.
A company like SpaceX can raise all the money they need from a small number of like minded investors. It saves them the hassle of dealing with thousands of shareholders with their own risk tolerances, investment goals, etc.
That's all well-and-good for SpaceX but it proved to be pretty catastrophic for the dozens of pump-and-dumps that bankrupted many Americans when we tried that previously.
You can buy Google as a proxy. A poor proxy but proxy nonetheless. The "plus" side is Google might make similar investments in other ventures like this so your bet on space is more diversified.
I wouldn't be surprised to see SpaceX do an IPO in the future. I'll definitely buy in even if I would do that as a kind of kick-starter rather than for the potential return.
I am not surprised. In one of the Ted Talks, Larry Page had clearly mentioned that he would rather leave all his money to someone like Elon Musk than donating to a Charity. He is going down that path.
Edit: Never mind. So many posts of the confirmed news are popping up that there needs to be a new thread. https://news.ycombinator.com/item?id=8919901 is a reasonable article and not behind a paywall, so it may as well be the one.
Can someone with some experience in satellites tell us what is possible in terms of satellite internet. For example, I really doubt most individual people would be able to actually connect directly through satellites. If that is the case, a satellite radio would have to detect and distinguish millions of different simultaneous data streams. I doubt there is enough spectrum for this.
I'm optimistic about satellite internet done right, but I'm worried the speeds and lag are going to make it a bit frustrating compared to fiber. In 5 years (when this will be completed), I think virtual reality will be penetrating the masses. Can satellite internet handle virtual meetings, virtual online gaming, etc without major lagging?
These are going to be LEO satellites (no higher than a few hundred km), instead of GEO satellites, which would make the lower bound of the latency pretty low (comparable to cable or DSL).
The alternative to the market served by satellite Internet isn't fiber, it's nothing (or in some cases, cell towers). To address your point: The satellite network would almost certainly be in LEO. There's no fundamental reason why LEO satellites should have high latency. They're only a few hundred kilometers out, so round trip times are measured in single digit milliseconds. GEO sats have latency (and bandwidth) issues due to their distance from the surface.
I suspect the initial use case is low bandwidth protocols (email, IM, notifications etc) that don't mind high latency rather than "high" bandwidth stuff (browsing, streaming video etc).
It's certainly better than the alternative in some places, which is zero internet. Look at how widespread "dumb phone" use is throughout Africa. Some incredible and empowering things can happen when unprivileged folks are given what we might consider outdated technologies.
Google Ventures' budget is reportedly nearer $300-$500M/year so I would imagine this is something different. There were rumblings of Satellite internet coming out of GoogleX but this seems to fit with their new Energy / Access group (Where Project Loon ended up) too. So my answer is that it definitely won't maybe end up in Google Ventures.
Considering satellites at that altitude and quantity would be ideal for cell handsets. I would be surprised if Apple wasn't trying to get a piece of this action as well.
Cable and DSL also have an 'outdoors' component, adding an external antenna for either improved bandwidth or to get the thing to work at all should be an option for a new broadband medium.
And when you're on the move that doesn't matter. One way to make it work untethered indoors is to simply bridge the satellite downlink box to a wifi repeater. That would get you coverage indoors and outdoors from regular devices around your house, and if they sell enough of these downlink boxes they could conceivably pool the bandwidth by creating a mesh of them.
All kinds of interesting options, even if it doesn't work directly indoors.
[+] [-] cft|11 years ago|reply
[+] [-] tuna-piano|11 years ago|reply
A) whatsapp improves the daily lives of hundreds of millions of people. You don't necessarily need an absurd customer lifetime value to get a $19b valuation with that many people using your product.
B) SpaceX provides almost no current value to anybody. And the people it does provide value to are "free riders" in the sense that they love watching space travel and get to watch SpaceX regardless of whether or not they pay for it.
Just an inexact thought experiment. Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10?
[+] [-] vidyesh|11 years ago|reply
WhatsApp is a consumer product. It lives as it breathes. As long as people/consumer keeps pumping in money & time to it, its value will stay or rise from its current value. Once that stops and people/consumer stop using it, its value will eventually fall.
SpaceX on the other hand is not a consumer product yet, but is aiming to become one. Consider it just like Boeing or AirBus, nobody would have valued them as a multi-billionaire company ( back in 1900s when they were founded). Their technological advancements and the development phase would have been same as SpaceX right now.
But eventually it became a very integral part of human life. They have become a consumer product, their value is now because of people using it daily. And unlike WhatsApp people won't stop using air-travel.
Everyday people do not invest directly into it like they do(?) for WhatsApp, but indirectly by using airline services they are paying for it. Similarly for SpaceX everyday people aren't investing in it right now but eventually ( as per SpaceX's ambition ) people would just like they are doing for air-travel.
[+] [-] lazaroclapp|11 years ago|reply
There is also some level of tragedy of the commons problem going on, in which SpaceX benefits all of us every time they successfully test a new design, but it only benefits their investors when they manage to get mining rights to the moon or set up martian tourism or the like. Goals which are possible - which is the impressive thing - but still very risky bets.
[+] [-] threeseed|11 years ago|reply
SpaceX is in an industry with better financed/politically connected companies and an unpredictable revenue stream. It's a risky business by every definition. WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform.
And if you think that human-human communication is less valuable than putting a few satellites in space (NASA/ESA/ISRO/etc are the real keys to future space exploration) then I would argue your priorities are a bit warped.
[+] [-] louhike|11 years ago|reply
[+] [-] raldi|11 years ago|reply
[+] [-] jpadkins|11 years ago|reply
[+] [-] hueving|11 years ago|reply
[+] [-] crystaln|11 years ago|reply
[+] [-] aleem|11 years ago|reply
[+] [-] stevenkovar|11 years ago|reply
That is to say: WhatsApp is much further along its individual trajectory than SpaceX is. In decades, the value of SpaceX is likely to eclipse WhatsApp, which in all likelihood won't even exist any longer.
[+] [-] icebraining|11 years ago|reply
[+] [-] r00fus|11 years ago|reply
Market capitalization does not indicate importance to the human race, though it's easy to lose sight of that.
[+] [-] new299|11 years ago|reply
With science based startups the partner at a VC can't easily make an independent assessment. They have to rely on specialists to do tech D&D and they rarely trust them completely. So they shy away from those deals, or they factor the risk into their valuations.
This behavior somewhat ironically can make these investments higher risk. There is a degree to which fund raising at a lower level makes a company a higher risk, because they have less money to work with and can't afford to make mistakes. (the converse is also somewhat true).
[+] [-] pc2g4d|11 years ago|reply
[+] [-] deciplex|11 years ago|reply
Post?
[+] [-] narag|11 years ago|reply
[+] [-] espitia|11 years ago|reply
[1]http://www.history.com/shows/men-who-built-america (available on Netflix)
[+] [-] brianstorms|11 years ago|reply
Right now Tesla Model S vehicles connect via AT&T (at least in the US, don't know what the carriers are in other countries). It's a tiny number of "devices" connected to the network so it is probably expensive for Tesla. At some point it gets really expensive. One assumes the Model 3 will have the same always-on connection that the Model S/X has. Millions of Models S/X/3 around the world mean a lot of communications costs. And then there are the SuperChargers, that will in time no doubt be communicating with cars too, to improve the user experience.
I suspect a few million "devices" connected to the SpaceX version of global wifi would be way cheaper than connecting to a dozen or two carriers in countries around the world.
Just a theory.
[+] [-] AYBABTME|11 years ago|reply
[+] [-] pcarolan|11 years ago|reply
[+] [-] stevewilhelm|11 years ago|reply
A company like SpaceX can raise all the money they need from a small number of like minded investors. It saves them the hassle of dealing with thousands of shareholders with their own risk tolerances, investment goals, etc.
[+] [-] mikeyouse|11 years ago|reply
[+] [-] meric|11 years ago|reply
[+] [-] jacquesm|11 years ago|reply
[+] [-] sidcool|11 years ago|reply
I think this is a great move by Google.
Source: http://www.ted.com/talks/larry_page_where_s_google_going_nex...
[+] [-] dang|11 years ago|reply
Edit: Never mind. So many posts of the confirmed news are popping up that there needs to be a new thread. https://news.ycombinator.com/item?id=8919901 is a reasonable article and not behind a paywall, so it may as well be the one.
[+] [-] hristov|11 years ago|reply
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[+] [-] pbiggar|11 years ago|reply
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[+] [-] logn|11 years ago|reply
Musk said the Internet access would be "unfettered certainly and at very low cost". https://twitter.com/elonmusk/status/531996243904716800
Hopefully there's a way around needing a satellite dish, aside from dishes that share their connection over wi-fi.
[+] [-] pmurphyirl|11 years ago|reply
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[+] [-] karmicthreat|11 years ago|reply
[+] [-] corford|11 years ago|reply
[+] [-] cft|11 years ago|reply
[+] [-] jacquesm|11 years ago|reply
And when you're on the move that doesn't matter. One way to make it work untethered indoors is to simply bridge the satellite downlink box to a wifi repeater. That would get you coverage indoors and outdoors from regular devices around your house, and if they sell enough of these downlink boxes they could conceivably pool the bandwidth by creating a mesh of them.
All kinds of interesting options, even if it doesn't work directly indoors.
[+] [-] talalbaweja|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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