Business Concept for the Artemis Project

1. We split the project up into sundry business units: space flight, merchandising, publications, retailing, motion pictures, etc.

2. We develop individual business plans for each business unit, leading to a private offering of equity investments in each area.

   This is where we are right now: developing the detailed business plans. It's not going fast enough for some folks, but this business must last a long time; it must have a solid foundation and all the activities must be coordinated when they happen. Getting together the team of existing companies and starting new ones where we need to takes a lot of careful planning; the project is too precious to do a slipshod job at this point.

               Spacecraft Design      2.68 %
               Software               2.17 %
               Operations             1.75 %
               Test                   4.62 %
               Launch Integration     0.26 %
               Marketing              1.45 %
               Hardware              24.68 %
               Launch & Recovery     56.28 %  (ouch!)
   
   

   That's from the latest and worst estimate of the costs. Revisiting the numbers to see how pessimistic we could force ourselves to be, we came up with a total cost for the flight of US$1.421 billion. We got a bit lavish with manpower for design, test, and verification, and assumed no net help from volunteer effort.

   The important point here is that costs up to the point we're ready to start acquiring the expensive hardware are only about 25% of the total cost of the flight. We can go a long way with just the money from preflight sales.

3. People find the project attractive both for the adventure that has always been part of manned space flight, and because suddenly space flight can be a relevant part of their lives. There's a lot of concept shock to deal with; folks aren't used to thinking of space flight as private enterprise, and the idea they they, too, might be able to go there hasn't been part of NASA's story since 1959.

   We offer fun and adventure, and outright tell people that if they buy our stuff, the profit funds the space flight.

4. After demonstrating the initial viability of the project, debt financing becomes reasonable for growth in the entertainment industries. Bankers understand merchandising industries, even when space flight seems like a long shot risk.

5. Profit from these ventures is used to fund development of the moon base.

   The important point here is that costs up to the point we're ready to start acquiring the expensive hardware are only about 25% of the total cost of the flight. We can go a long way with just the money from preflight sales.

   Incidentally, "corporate management" is so high because it includes things like lawyers, business managers, liaison with NASA, etc.

6. If the appeal is there but the market isn't big enough to make things move as fast as we'd like, we go out with a public offering to fund the real moon shot; or maybe corporate bonds.

7. We do the flight, make the movies and television shows, and sell the merchandise. Estimated net profit through this point is over $5 billion.

There's an important point hiding in here: That $1.4 billion is not the total capital required to do the project. We can do a rough estimate of that now by making some assumptions. Suppose the average profit returned from the supporting businesses is 5%. (It really varies all over the scale.) Then to raise $1.4 billion, we have to do $28 billion in total sales over a period of about 10 years, or an average of $2.8 billion per year. That's a business roughly 1/3 the size of Disney.

This doesn't mean The Lunar Resources Company needs to be that big; but the total team of all participating companies does. Now, suppose to generate that $28 billion in sales we need 20% of that number in capital. (Another number that varies a lot.) That means we, plus our business partners in other companies, need to burn up $5.6 billion in total capital over the same period of time.

These estimates are very imprecise, but it gives you an idea of the business challenge we're facing. It also might help explain why we're putting a lot of effort into bring established entertainment companies on board instead of trying to grow The Lunar Resources Company from the ground up.