TGV Rockets Takes Off
by Tim Mack*
More than 110 members and guests of the MIT Enterprise Forum of Washington-Baltimore attended an excellent and spirited business plan presentation by the top management of TGV Rockets at the NRECA conference room June 29. With the rocket theme, the event adopted a 4th of July picnic atmosphere with BBQ style food and ice cream sundaes. It also closed out the MITEF case study presentations for the summer break.
The event began with a discussion by Kevin Quinn, president of BitWrench Inc. -- an MIT Enterprise Forum sponsor. Quinn talked about new, open development techniques for software and the influence of the Internet on this innovative approach to shared technology, such as that utilized by the successful Red Hat enterprise. His basic message was that this building and debugging a CORE through Web posting is still an evolving approach, but one with enormous potential.
Retired Navy Capt. Kent Ewing, now chairman of TGV Rockets, began the business presentation by placing the company in the new, post-Cold War competitive environment as they develop lower cost, higher reliability sub-orbital rockets. The sub-orbital flight market is currently valued at $250 million annually, but TGV sees its potential at $2.5 billion or more after including markets such markets as microgravity, earth science, military, atmospheric and space research, semiconductor and pharmaceutical production and cinematography, and tourism.
In contrast to the highly expensive vehicles now useTGV plans develop functional less reusable that vertical takeoff and landing techniques. Their initial rocket MICHELLE-B (Modular Incremental compact High Energy Low-cost Launch Experiment) will carry one metric ton payload 100 kilometers altitude.They project reducing cost of a sub-orbital flight from $2per kilogram $200. Furthermore hope reduce time between vehicle flights an average 300 days as low three hours. Finallywith powerful but adequate power system G forces can be lowered 40 times force gravity only fourmaking access space possible for private citizens health, as well as reducing payload development costs significantly.
While the largest overhead cost remains insurance, the ability to use private launch facilities and pilot guided takeoff and landings reduces costs by an order of magnitude. In addition, the use of off-the-shelf technology avoids expensive and lengthy engine and avionics development.
After illustrating the many opportunities for research, commercial and even tourism services of a reusable, vertical take off and landing vehicle, the team responded to a very knowledgeable panel of business plan reviewers, including the business development manager for Lockheed Martin's X-33 Aerospace Plane. This was followed by comments from the audience, which included the manager of NASA's Apollo program. In response to issues about a senior manager, financing, marketing and technology, the TGV team further expanded upon their vision, strategy and alliances and demonstrated a willingness to rise to the challenge of a 'no-holds barred' review of their company. Recommendations from the panel included more focus on the end user and a more detailed listing of cost savings. A recommendation was made to involve potential buyers in TGV's development so that you contribute to each other's success.
Other suggestions included reducing the business plan to 20 pages, leaving only the most critical elements. The plan should be preceded by an executive summary that answers the questions, "Why should the reader care?" and "What are TGV's unique strengths and why will they succeed?" It was also recommended to include a more candid discussion of the potential challenges as well as what might already be accomplished.
Other recommendations to their business plan were to include details on testing to date, what has been done -- or needs to be done -- towards FAA approval, and how will cost contingencies be handled. How to increase return on investment and greater sharing of risk with investors was a matter of discussion, as was the need to benchmark comparable industries.
Overall, it was clear that all participants felt the time was well spent. CEO of TGV, Pat Bahn, noted after the event, "The MIT case study process is fantastic. We couldn't have paid to get this sort of intense, quality feedback."
* Tim Mack is a Board member of the MIT Enterprise Forum and managing principal in AAI Research, a seven-year old marketing research firm which provides innovative strategic approaches to a wide range of entrepreneurial companies, associations, nonprofits and consulting firms. Any direct feedback on this article can be left at 202-332-0846 or at email@example.com.