Thoughts on small sat and cube sat market size.

I went to Small sat last week. I'd never been to that conference and it is clearly a conference where people are actually building things. I went with the goal of answering one specific question:

"If I offered a dedicated 3U launch capability to any orbit < 600Km for 500K per launch how many would I launch a year?"

I asked this question over and over to government, vendors, academics and anyone that would take the time to discuss it with me.

I got answers varying from 0 to 500/yr.

I think the real answer will eventually be 20 or more launches a year. If the question is changed to 20Kg and 1M I get the sense the number of launches would actually go up.This is a SWAG (Sophisticated wild ass guess) its hard to generate a better answer because of the uncertainty hovering over the whole community.
At this conference Spacex announced commercial 2nd ary pricing of 200K to 325K for a 3U, giving some validity to my swag. The number of small sats launched is clearly undergoing growth, maybe even exponential growth. The problem is the people building the cube sats are not really paying for their own launches. They all have sponsors that are giving away secondary space on existing launches. The majority of people with real $$ to spend (IE DOD ) still think that the cube sats are toys, and the most forward thinking DOD people see them as marginally useful experimental vehicles.

Given just those facts I would have to conclude that today there is not a viable cubesat market.
The elephant in the room is that EVERY one I talked to has funding uncertainty.

All the program managers all say they have all these interesting plans that will happen as soon as the budget is resolved and they get their expected xx% increase, just like they got xx% last year and the year before. Not a single DOD, NASA or other government entity even acknowledged the possibility that they might see a significant reduction in funding. Collectivly they are either in denial or blind.

While today the university cube sats rely on the significant crumbs from larger programs, they are in fact demonstarating real usefulness. When the reality of the current long term funding sinks in to the smart and nimble among the program offices they will be forced to consider 5M cube sat programs as opposed to 100M conventional programs.

I see the next 5 years in the small sat space to be really volatile and chaotic. 5 to 10 years from now there will be a well funded thriving small sat/ cube sat market that could easily support several dedicated launchers. I just can't see what the details of this transformation will look like over the next 5 years.

How is that for a long and rambling non-answer.