Michael Kaufman

Good morning and welcome back. Are there any thoughts about the work we started yesterday and that we have to do today?

Discussion

It seems to me that this kind of conversation needs an outcome of decisions.

We need some concrete recommendations.

Beyond recommendations, we need to determine where and how we take the information in order to get energy and synergistic collaboration.

I'd like to come out with some funding for my center.

This activity revolving around Ames seems to make them be the primary soup. If that's true, one of the workshop outcomes needs to be moving this group to a type of strawman or pilot organization that can influence NASA. Unless they can put that together in an experimental fashion, NASA won't have a clue as to what to do. It can't be an intermittent type activity.

One of the ideas behind the portal is to make interfacing with NASA easier. It will also be about a consortium. It's still in the formative stages and how that's formed could be part of the dialogue here. We're looking to this community as to exactly how that should work.

Is there utility in having a group talk about the interfaces between the Space Portal and the community?

Yes.

Something I see missing is a group of people to start a program of developing a strawman regulatory environment instead of asking the FAA about putting folks in space. We need to determine that and not leave it to folks in the UN. We may not be happy with their results.

We should recognize there are a set of dynamics happening right now, e.g. COTS, a new center director, the SPD folks in a state of teaching, and things being very dynamic. The timing is good to have something significant come out of this.

The intellectual property issue is a key focal point for why things haven't flowed smoothly from a NASA perspective.

The research partnerships have better arrangements. One reason to evolve those partnerships is to work better with NASA.

One thing that came up at the reception last night was that we need to talk about the different investor pools, not just VCs and pharmaceutical companies, but the societies such as Diabetes, Cancer, and others where support is given by motivated investors and without barriers of grant pools. We also need to look at literally creating a pool where multiple groups of people can put money in as an aggregate to get us where we need to go. Paul Masson has actually opened that up with an interesting strategy. Also, we need to talk about the philanthropists more and who are looking for ways to help. Space interest is high in those areas, especially if it benefits society in some way.

Legally, there is a big distinction between profit and not, but at first it's fuzzy. There are many folks that aren't sure they want to be entrepreneurs or philanthropists but they want to see the whole spectrum first.

There have been many people who have invested millions but with few success stories. NASA and the commercial sector has been successful. What we did right early in the space program was to have a good concept. All this around us in Silicon Valley wouldn't be here without the first space technology. The world has changed because of that single act. NASA is not a partner; they aligned to the investor. In the end, you look at NASA as number one. I would like to see us go back to creating an information exchange between NASA and interesting things going on. Let the market decide what has merit and not. NASA should tell us what they are doing for the next 10-15 years; they're currently not. This uncertainty creates doubts about what you're talking about doing. Also, there needs to be creation of a charter, like they did in Jamestown 400 years ago. Then there would be an entity that can be dealt with and there could be a timeline to work with. Many things are happening on individual projects, but there are many that aren't for lack of information about launch schedules, etc.

Thank you. You will have opportunities throughout the day to work on specific opportunities. We'll talk about that later, but first we have a presentation.

I want us to hear about the aspect of the space entertainment side. To fulfill that, I've asked the next speaker to come talk with us about that. Jane Reifert is the President of Incredible Adventures. I asked her to give us a feel for the growth in this area. What we talk about is based on the profile of what we plan to do. She is somebody who has a successful business on getting folks interested in space activities.

In 1993 we were the first to introduce the high performance holiday. We are currently marketing to Rocket Plane and Zero G. I'm concerned many building flight plans feel they are building a field of dreams, that if they build it people will come. I'm taking more of a business approach.

I have 10 bits of wisdom to share. The first is to choose your sales team carefully. The Zero G company has experience with how important that can be and how detrimental it can be without a sales team. Sales may not come quickly or easily. It can typically take three months from the time someone calls to actually closing the deal. People have to trust you immensely and we rarely see them so we have to build trust through all communications with them. Buying a dream is different than buying a car. The salespeople will really be information providers. They have to provide many details and requirements.

Knowing your potential customers is very important. Space customers tend to be older, primarily men over 50. About 30% of customers live outside the US and are busy making a lot of money. Another factor is that they come in large sizes; people who make a lot of money tend to eat well. Most of our programs have weight restrictions, so the bigger the seat, the bigger the market.

Creating a unique 5-star product is important. The goal is to be unique.

Designing great marketing materials is very important. You must tell it like it is. The trick is to make space travel sound wonderful but you also have to tell the realistic facts. You need to be able to explain things in a way the average person can understand.

Pay attention to the legal stuff. Safe is a dirty word. Instead, explain that the adventure is as safe as we can make it. Assumption of risk will be key to the space industry. Making something safe will also diminish some of the appeal if it sounds boring. Sorting out the tax stuff early is also important. The Zero G folks learned this lesson the hard way. So there are some of the little details a space travel person has to think about everyday.

Never underestimate the value of a good cancellation policy; customers have been known to lie. We realized there have to be rules for everything. You can bend tough rules but its hard to go backwards on that. From a business standpoint, everything is based on numbers.

Plan for the worst case because things break, weather happens, sales disappoint, etc. You have to be realistic. It's easy to over inflate the sales figures; so be careful. Set realistic expectations for you and your shareholders. You have to be careful in your marketing. Sometimes being first to do something isn't always the best strategy.

Service and reputation are everything. You're building trust, and making that first customer happy is critical. Help prepare people ahead of time for what they will experience. Don't make promises you aren't sure you can keep.

I have a story of Ro and the free helmet. Ro was our first marketing guy who believed that you tell folks anything necessary to get the sale, so he was promising free Russian helmets to customers. He couldn't deliver on that promise and caused ill feelings.

There's no competing with the best; you have to dare to be different. We want everything we do to be beyond our competitors.

Anyone in the space industry needs to get people like me who are involved in adventure sales and marketing early in the game. Space tourism is not new; it's just another adventure.

Q: Have you had any experiences with customers panicking on your adventures?

A: The medical check is to tell whether they are healthy, but to get their state of mind is harder. With our civilian space flight training, you need to know when you can quickly land the plane. Sub-orbital flight can't easily land quickly. We're trying to prepare people ahead of time. We did have to land a Zero G flight once due to hungover customers. The medical check can't tell mental things, but talking to someone months ahead of time helps determine their potential to not panic. We do have paperwork stating that we can refuse to sell to anybody.

Q: Are you up to making hotel accommodations?

A: We do hotel accommodations when we need to. We can help someone get to Russia and leave. We arrange tours, etc. if requested as part of our customer service. We do know from the phone calls that the same folks wanting sub-orbital flights also do other adventures like shark dives, so we try to provide good customer service.

Q: So the market group is those that seek incredible adventures, not just about space?

A: Yes. People will do space flights because they can financially. Price is important as a prestige point as well, e.g. you wouldn't want a Rolex if it only cost $5.

Our specialty is in finding and dealing with customers. We haven't found partners we trust to maintain our level of customer service.

Q: What are your recovery plans when an accident happens?

A: I have no clue. You're saying when, I'm saying if. We've had broken ankles and other minor accidents, but I don't think not having a plan will hurt future sales. Whenever there are shark attacks, we have requests for dives go through the roof. That becomes part of the accepted risk people sign off on. I live with risk, and know that one of my customers may die, but I make sure they know that too.

Q: Do you propose to have folks do other earth based adventures before going into space?

A: We can suggest it but don't force it. They also get more enjoyment out of it if they have some experience before going into space. The space flight training idea actually came from a customer.

Comment: Co-locating similar related services could get some folks into the lower level adventures and then move up to space flights.

Q: How are Zero G's actual figures compared to their projections?

A: They are not up to the projections. Education of just what is offered is important.

Q: I understand Google bought several flights. Are you involved in group deals for organizations doing team building?

A: I sold a package to Hewlett-Packard for 48 of their folks to participate in adventures. So the answer is yes, but it is a high financial investment by a corporation and usually only for a select few of their employees.

Q: Is there any support of R&D?

A: We hope to do some R&D but we haven't finalized it. Yes, we're interested in R&D but we don't know how to go about getting the right people to help with it.

Q: What do you actually have in marketing materials to help folks understand?

A: We have videos and other marketing materials, but it's hard. A lot depends on existing customers to spread the word. Much is just through explanations of our sales team to potential customers.

Q: What about ancillary spending for the rocket trip? Is it all about getting the photos, video, experience, etc. or are there people interested in learning about what's really going on.

A: People want to learn but not in an overt manner. Our customers are more educated than the average person but they are not experts. They want learning but it has to be boiled down to basics and fun. We teach them the real stuff but also spend time making it fun. They want the TV type shortcut to learning.

Q: How about booking on the space hotels?

A: I can't get excited about it if I can't make money on it for years and years. I'm a business person. I'm not the dreamer; I just want the dollars in the bank account. I try to be realistic in offering future adventures.

Q: Why should anyone go to Rocket Plane vs. your competitors.

A: They don't have sales people like me. Typically, potential customers find me before finding companies like Zero G. I know how to market. We save companies from having to hire a sales team and make brochures.

Q: What has to happen business-wise for the market to accelerate in the Zero G field?

A: Another movie about Zero G would help tremendously. Things are beginning to pickup. Demand is cyclical. We're introducing a new product and the demand is growing.

Q: The Zero G flights are cheap enough. I'm wondering whether lining a critical mass of customers at air shows could provide more customers.

A: There is a Zero G plane scheduled to come into Vegas. Air shows are not good venues for our adventures. We offer to the corporate financial types vs. the typical weekend air show attendee.

Q: Do find people prefer zero gravity vs. being strapped down?

A: There will be nobody babysitting adventure customers, so they can unbuckle if they want to. How much do we prepare customers ahead of time without fear of them backing out?

That's all my time. Thank you.

Michael Kaufman

For those not here yesterday, our flow of work is from large to small groups. Where do new ideas come from?

Comments: Brainstorming, showers, old ideas, power naps, problems, scenario planning, unusual connections, dreams, desperation, lots of reading, bad ideas, exposing yourself to new things, changing fields and getting out of your normal focused area, introducing a new discipline and approach, sleep or incubation time, and creative tension.

I will now ask you to do some of those things. The next round of breakout groups will have you look through a different lens at the challenge. You will be in cross-pollinated groups to do that. There is the potential of creating a different conversation for this afternoon from that. So, find your name on the team lists and you'll find your assignment in the breakout areas. Thank you and let's get to work.