Motivations: Profit for all at every step

People do things when they are motivated. Money is not the only motivator or even the most important, but is often key. Wanting something doesn't matter if you can't pay for it.

Lot's of people would like to live on mars and the technology is becoming available. But the cost is prohibitive and will probably remain so, perhaps forever. Settlement will never happen if the cost is put on the colonists themselves. This is the problem with Musk's plan to offer tickets for $500k. That sounds good (or at least doable for some that are highly motivated) until you realize it doesn't include a space suit which by itself costs millions of dollars. But even if that cost comes down you still have colonists scraping together their life savings to arrive on mars in poverty with a struggle to survive. Will they then be free to pursue their own happiness or slaves to the entity that brought them, always living in poverty in an environment trying to kill them? That would be a major disincentive to becoming a martian regardless of their enthusiasm or other motivations. Even if some overcome this disincentive it means many of the skills needed for survival will be left on earth as many of those people can't afford the trip even if they want to go. This is the first hurdle that must be overcome. Survival will require a community having many people with many skills so they can live off the land.

Colonists will be risking their lives for the betterment of all of humanity (by opening up the economic sphere to the whole solar system which promises to be many times the size of earth's today.) The right plan for colonization will allow them to travel for free and arrive with enough assets to thrive. Any that want should be able to go although there will be competition for the limited seats. Those that arrive should be free people pursuing their own happiness in a community of free people.

The motivation (profit) of the transportation company is of highest concern.

The estimated cost for transporting a single colonist range from $1.5 billion to $500 thousand with that lower cost being further into the future if achievable at all. Transported in bulk (about 4 dozen per mission) my best estimate is about $50 million per colonist. To show that is in the ballpark consider the high end of the range: Mars One has a carefully considered plan to put four on mars in ten years for $6 billion ($1.5b per.) By sending 4 dozen at a time instead (12 times as many) I believe it could be done for $2.4 billion. For example, just to get to earth orbit, the Russians charge $65 million per seat. SpaceX has offered to do that for $20 million per seat (competition is a great thing to behold) but using their soon available Falcon Heavy they could offer each seat for $2 million if they send 48 at a time (in a new vehicle bigger, but much simpler, than the current Dragon.) That would be 4% by my estimate of the three step journey to mars. Savings in the other two steps are similarly possible considered against other proposals. The N.S.S. demonstrates a similar cost savings.

So, using $50m per passenger (which includes the cost of a space suit, travel supplies and the fuel cost to allow each passengers personal provisions that arrive with them on mars) how does the company transporting them break even? Break even is important because it allows other motivations to emerge.

The Space Settlement Initiative makes the persuasive case that even at very little value there is enough land available (144 million sq. km. on mars alone) to easily fund space settlement. However, there are consequences and other problems with their plan (although it is a good one in many respects.) First, it requires governmental blessings. This is an artificial hurdle that is easily avoided. Second it puts the burden on the colonists which is the same defect as the Musk plan. Third it gives entities governmental power over colonists being a company town writ large. This is also easily avoided. The major good idea of the plan is that once the governmental blessings hurdle is overcome it should pay for colonization up front. Assuming they don't just keep the money and run. There is that motivation, right? I am not suggesting that is the case, but we can't be oblivious to the possibility (money in large sums does tend to corrupt, doesn't it?)

Here's a lightbulb...  You don't need any government to bless land claims. Historically, people simply make reasonable claims and governments go along. Claiming by possession that which nobody else has a claim to is a natural right... as long as the claim is reasonable. Once title is being passed in a chain it becomes legally enforceable especially if part of a documented procedure followed by many. That's just how things work. Lawyers will of course argue about that claiming jurisdictions they really don't have. Let them argue. The martians can safely ignore them (and easily get around them when they have to) while setting up their own legal precedents. The key is the claims must be reasonable, which is a problem if you claim Alaska sized territories (this does require government blessings.)

My plan is to let each colonist claim one square kilometer and no more (if they want more, they buy it) and for the private company transporting those colonists to claim 1000 sq. km. per colonist. Is 1000 enough considering others suggesting up to 1,518,800? (Which, to be fair, is not per colonist which still have to pay their own way.) Well, let's see...

What is the value of martian land? Google that and you will find companies selling worthless pieces of paper for $20 and up for undisclosed amounts of territory. The Space Settlement Initiative talks about land values of $260 an acre and up which is not unreasonable. But here's the thing about value. It is determined by what people are willing to pay. By that measure, martian real estate is currently worth close to zero today. That changes when perceptions of value change. That perception changes when people are able to engage in trade. Those people paying $20 for a worthless deed would find its real value if they tried to sell those deeds. However, people in actual possession of property start to give real value to that property. They give even more value to it as they go from undeveloped to developed property. People want to recover their costs when they sell something. But who would buy it?

Well, the universal rule for land valuation is location, location, location which would also hold for mars. We also have to distinguish between developed and undeveloped property. Let's start with developed property first...

A colonist, as a member of my plan, arriving on mars claims a sq. km. which has almost 500 half acre plots if they choose to sell them that way. The first colonists will have to build their own habitats and farms. They will have to deal with power, plumbing and wastes and everything else. Development will take materials, labor and perhaps months of time per habitat. New colonists however, have a new option. They can have a habitat ready for them when they land by buying it from a colonist ahead of them. They will need a habitat, which would cost them the same materials and labor but save them months of time if they buy instead of build. It would be a no brainer for them to pay a few percent more than it would cost them to do it themselves. That few percent (averaging perhaps $2000) provides every martian with a lifetime income of over a million dollars and potentially much more. That's above any other income they may come up with (a free community offers many opportunities for such and just labor will be in great demand for generations.) As more land is developed, more locations increase in value.

Ok, but let's get back to the transportation companies and their motivations. They would have an expense per colonist of about $50m and an income of 1000 sq. km. which would be over 400,000 half acre plots for sale. So to break even they'd require less than $125 per plot. Is that possible? It is arguable, however we already have people throwing away $20 for much less and under $100 you are looking at impulse buy territory. For undeveloped property near developed property I think bidding would raise the price much higher. It is speculation, but the history of land values near growing communities has an impressive history behind it. This money is coming from earth speculators because mars doesn't have that kind of economy yet. But with every martian arriving with more than a million dollars in assets the motivations are all in the right direction.

You can all become members of my plan simply by supporting it at no cost except perhaps for ridicule. You can handle that, can't you? You get the last laugh ya know. Remember the economics get better as costs come down but work right now at today's costs. When we approach Musk's estimate the break even point for the transportation companies approaches a dollar per acre. What's that movie line? I'd buy that for a dollar! The potential profits for the transportation companies is 100 times more than any individual colonist which is then multiplied by how many colonists they send. That's potentially trillions of dollars** (more when they hold the land longer instead of selling it all right away) which some might consider motivational.

Profit, every step of the way

The first step is to get to earth orbit. SpaceX is already on track to do that at a profit. By sending more than seven at a time, they could continue to profit while bringing cost down by a magnitude (from $20m to $2m.)

The second step is going from earth orbit to mars orbit. Here are some thoughts on that. The point being that a reusable ship with a one time cost to orbit could be operated for a profit selling tickets to passengers or an entity purchasing those tickets (known as the transportation company in my plan.)

The third step is landing safely on mars which is a challenge SpaceX is working toward with their Dragon 2 (Elon gleefully says the current Dragon, even with superdracos, could get there but would make a nice crater.) Elon has suggested they could put a lander ready to go in mars orbit for about $150m. Taking 4 to 7 colonists this is actually the most expensive part of the trip. But keep in mind, that price includes profit for SpaceX already.

Update:

The Mars One lander (larger than the current Dragon) will land 2500kg on mars for about $190m including up to four crew.

Update: This implies a surcharge of $76k for every kg imported from earth. This means incoming colonists would have assets potentially worth millions (every 14 kg) just from whatever they have extra for trade from their transportation allowance. /end update 

The MCT appears to be both a transport and a lander. Details are sketchy, but Elon describes it as carrying more people than Dragon and being roomier. It would be launched directly to mars which is apparently how he intends to reach the $500k per passenger price.

/update

So a transportation company, not owning any vehicles themselves but just making the arrangements, buying tickets from vendors who themselves are making a profit, could for perhaps less than a $3b investment have a huge profit potential and open up the solar system to us all.

Update:

That isn't $3b up front. That's $300m a year for ten years, but also includes revenue and a large potential profit (up to 5x the cost if Bigelow is correct) each year. It would not take a billionaire to do this. Just someone able to finance the first $300m.

/update

Consider also, once the infrastructure is in place, some may pay their own way. $50m is not much more than the $20m some have already paid just for a week or so tour in earth orbit. Things happen after other things happen and possibilities become realities.

Update: A reference mission with the best numbers I've got.

Objections to the plan.

Summary

• Colonist travel for free and arrive with assets for the risk of their lives.
• Vehicle providers sell transportation tickets ALL at a profit.
• Any company making the arrangements profits.
• By agreeing to the terms of a settlement charter.
• By making the arrangements and buying tickets from other vendors.
• They have all the right incentives to make it work. The terms require them to get colonists safely to mars with considerable assets before they may claim anything. The colonists claims give their claims legal weight.

Finally, if a company promotes it properly, they could make pre-sales to cover the cost of tickets. Those tickets themselves could be sold with a down payment and balance due. Creative financing among people that trust one another could do the job. I'm curious to see the kind of contracts the lawyers come up with.

**Yes trillions, but only if you include the entire 144 million sq. km. as potential real estate.