Interview withPrincipal Founder & CEONeal S. Lachman

Interview with Neal S. Lachman, Principal Founder & CEO of Titans Space Industries - by Titans Legion Captain Marcus Beau (Part 3)

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Published: September 1, 2022
Since we launched the website a couple of weeks ago for previews of our upcoming projects, we received many probing questions from Titans Legion members and the public at large.

Instead of publishing a FAQ, we decided to publish an interview between Titans Legion Captain Marcus Beau and our founding CEO, Neal S. Lachman.

The interview will be published in four parts.

This interview is the third part and concerns TSI's Space Tourism projects and project funding strategy.

The first part was about TSI's positioning in a world of aerospace and space behemoths like NASA and SpaceX.

The second part concerns the reality of TSI's orbital infrastructure, especially "Orbital Rings".

Tell us more about the space elevator and the floating island, how is that part of your business model?

As you know, there is no other structure on earth that is as tall as our first space elevator: 100 kilometers. While researching the regulatory and safety issues, we quickly realized that it’s quite impossible to organize this all under current regulations, and even though construction will be safe and secure, there may be some worries among the population of such a structure collapsing. Of course, that won’t happen.

We decided that building a floating platform in international waters gives us a lot of freedom and space.

Because of the requirements surrounding the construction and operations of our space elevator, we decided to build it near a new floating city, Titania Oceana (TO), which will include a resort, because where do you put all employees, visitors, and space tourists for several days? Where do you load and unload cargo?

We were inspired by the floating city designs and plans presented last year (2021) by the Blue Estate Group, which has since gone out of business. Especially their resort plans were aligned with ours.

Also, building our own floating city in international waters gives us the rights to form our own government. This takes away and solves huge issues for us, because when operating structures in space, whether it’s a bunch of space elevator or orbital rings, where do you pay your taxes? Who arranges the visa requirements? Which laws do you adhere to?

TO will have a real government, with real accountability, and with integrity. We want to be taken serious when talking about important issues like Earth defense, space debris, clean energy, and global transportation.

TSI’s projects have consequences for many nations in the world, and when organized in tandem with TO’s government, we will be able to offer many financial and operational incentives to some of the poorest countries in the world.

TO and TSI will have joined trading offices in as many countries possible, and when these countries acknowledge TO, there will be consulates and/or embassies. This will, for example, allow visa regiments to be negotiated among TO and partner nations.

As with all our projects, we’re taking 2023 for TO R&D and negotiations, to set up the stage for the real work. Titans Universe and its partners start construction of the initial phase of TO in 2024.

Space tourism is a huge aspect of our business model. We are the only company that is offering five separate opportunities.

1. Stratosphere Tours
2. Space Diving
3. Space Elevator
4. Space Hotel
5. Lunar Resort

Like with everything we do, there is a method to our madness. Yes, we want to build a space hotel (2027) and even a city on the Moon (after 2030), but we start with a relatively easy space tourism offer: a balloon that floats up to 30 kilometers and carries 6 guests to the stratosphere.

According to a research by New Space Economy, approximately 65% of the estimated $846 million revenues (from only 22 customers) in the space tourism sector was generated in 2021.

The industry is growing fast, but these space tourists are paying astronomically high amounts. We have a different approach in this industry.

We start with stratosphere tours, and it’s somewhat comparable to what Bloon (Zero 2 Infinity), World View, and Space Perspectives are proposing. Our partners in Asia are able to do most of our R&D, and we are focusing on a small port to launch the balloon and gondola from.

We start with stratosphere tours, and it’s somewhat comparable to what Bloon (Zero 2 Infinity), World View, and Space Perspectives are proposing. Our partners in Asia are able to do most of our R&D, and we are focusing on a small port to launch the balloon and gondola from.

World View raised $50 million, and Space Perspectives raised $64 million. It’s easy to understand why.

Space Perspectives prices are expected to be around $125K per person. You can calculate the revenue capacity (sales potential) of each system.

If there are approximately 200 operational days with one flight per day, and six guests per flight, you’d have a minimum capacity of 1200 guests, each paying $125K, that would be a minimum revenue potential of $150 million per annum. The project startup costs is estimated at around $100M - at least that's what they say in public. I think it's much less. Operational and maintenance costs per annum is a couple ten million dollars.

If our calculations are correct, they’d break even in less than a year. This is why they are raking in investments left and right to the tune of $64 million.

We want to charge less than Space Perspective and the others: $50,000 per person. Nonetheless, we expect to break even in the first 12 or 18 months. How crazy is that?

We also use a similar balloon and gondola structure for our space diving offer, but each diver pays approximately $750,000.

Then there is the huge revenue potential of our Space Elevator, starting from 2027 or 2028 latest. The customer turnover and revenue can be scaled up as we please, and ultimately (from 2030 onward) we want to have approximately 1,000,000 annual space elevator tourists paying approximately $5,000 each to go to 100 kilometer altitude.

No other space tourist offer can be scaled this big and at such low costs. But the Space Elevator (combined with a Titania Oceana resort stay) is expected to contribute at least $5 billion to our bottom line, every year.

The Titans Space Hotel will be operational everyday from 2027 or 2028 onward, but we estimate an initial frequency of one spaceplane flight per week.

Turnaround time per Titans Spaceplane should be much faster (several times per day), but let's assume the conservative estimate of once per week. There will be six guests per flight, making it a minimum capacity of 312 guests, each paying $5M. The Titans Space Hotel's minimum revenue potential is thus more than $1.5 billion per annum.

And this is where things get really crazy with TSI. We have a special offer for ultra-high net worth individuals, whom we call Titans Astronauts. They commit to paying us (over a certain period) somewhere between $25 and $35 million for a life-long membership during which they can go to space numerous times, not just once.

In fact, Titans Astronauts can also frequently visit the Titans Lunar Resort where they will have a time-share ownership of a suite/apartment.

Yes, but allow me to first put things in context.

Our business philosophy and strategy is that everything we do must be as simple yet as impactful as possible. The same goes with money issues. Many of the world’s most fantastic projects have failed due to the lack of funding, but who and what is to blame for that? Our founding team knows the ins and outs of business deals and financing.

A few years ago, we decided to take another approach to funding our projects instead of going to investors.

We could follow the funding model of World View and Space Perspective whose entire business model is just one of many of TSI’s. But our experience with some other businesses gave us several alternatives.

For example, early 2021, Titans Universe’s founding team was working on a lifestyle and experiences company, Titans World, where wealthy individuals can buy an annual membership and become a Titans Fellow, something like Steve Case’s Exclusive Resorts, but then more exclusive and with many more options.

At the same time, some team members and I were also finalizing our space related business model. Fast forward, we decided to pause the Titans World and Titans Fellow program to focus mostly on Titans Space Industries and Titans Astronauts.

Titans Astronauts get a lifelong membership and many opportunities to go to space and the Moon. Practically nothing Titans Universe does is out of reach for them. We’re reaching a milestone of 50 Titans Astronauts, but we are planning for hundreds and even thousands of them. You can do the math.

First, they can certainly go to others too. They are free to buy opportunities from multiple sources. They may like Space Perspective’s stratosphere offer too, or they may want to do a suborbital flight with Virgin Galactic, or they want to experience Blue Origin's or Axiom's offers. We don’t mind.

The question should be: Why should they want to go with other firms?

What we offer is different and much more than the others can offer.

We offer not just one-off opportunities: We offer multiple opportunities, and frankly, unlimited times (based on fair use).

The dollar amount we agree with our Titans Astronauts includes everything: multiple stays in the Titans Space Hotel, multiple flights with the spaceplane, space diving, stratosphere tours, space elevator rides, and flights to the Moon and the Titania Lunar resort where they'll own a time-share apartment, and the same on Titania Oceana.

Today, going to space costs several million up to twenty and even fifty million dollar, for just one visit. Our Titans Astronauts are co-owners of the company, what is ours, is theirs. They can go to space and the Moon as often as we can organize in a fair way.

We also offer perks that they love, such as naming rights of structures, buildings, roads, on Titania Oceana and Titania Lunar.

But also, equally important to the fun part is that the Titans Astronauts are helping us to save the planet.

We can build huge solar energy systems on our OrbitalLoop systems thanks to their funds, and they are paving the way for us to making space travel safe, efficient, and affordable. And last but not least, thanks to them we can build Titania Lunar and put heavy industry there to lighten Earth’s burden.

Any wealthy person associated with Titans Universe and Titans Space Industries through the Titans Astronauts program is a hero for humanity in our opinion.

You said that Titans Astronauts are co-owners. How does that work? Are they investors?

Titans Astronauts do not directly invest in our companies, and I am not at liberty to tell too much about our funding structure, but I can explain the rationale behind that statement.

Initially we didn’t want to include Titans Astronauts or any other investors in our fold; we would just rely on revenues and subsequent profits to invest in our projects: scale up, grow, and pay in phases. But when we realized that all potential Titans Astronauts were interested in equity ownership, we saw an opportunity.

Titans Astronauts pay us a lot of money (for awesome opportunities), and we decided that it will earn them stock options from a special equity pool through a new Titans Space Industries legal structure.

We’ll initially reserve one percent of TSI, which includes all space-related businesses under the Titans Universe umbrella (including the Space Elevators), and it can grow to five percent as the number of Titans Astronauts grow. Ultimately, if we really grow to a thousand or more Titans Astronauts, we’ll make 10% available for this awesome group.

The benefit with having Titans Astronauts as co-owners as well as anchor-customers is that we’ll have access to the wealthiest pool of brand ambassadors any company can dream of, and since they share our beliefs and values, the only way for TSI is up.

Does this mean that TSI projects are funded by Titans Astronauts?

Well, we rely on revenue first and foremost; that includes Titans Astronauts, but also third parties.

For example, we already have four pledges for the Space Diving, which should start from 2024 or 2025 onward. These are not Titans Astronauts per se.

But indeed, Titans Astronauts are our largest and earliest revenue generators. We depend on them to fund the initial phases of our projects, and our initial growth. And they depend on us for the opportunities of a lifetime.

End of Part 3
If your interest is piqued you can read Neal's analysis.