A large enough change in scale manifests as a change in kind.
As a topical example, SpaceX is trying to reduce launch costs by 20x with Starship, which just had its 4th test flight this morning. Some don't see the point: there's not nearly enough demand to launch thousands of tons into orbit per year. But 20x is a lot cheaper, so they're banking on induced demand expanding the kinds of projects that send things to space.
They're also planning to go to Mars, and Starship is the smallest vehicle that could enable that on the scale desired.
It's certainly a gamble that there will be a million people willing to spend $200k to do this, which… well, I think it's not entirely impossible, as the idea was something I liked until Musk's own personality put me off the idea of being stuck on a planet with only his sycophants for company.
Which is a bit of a shame, but still, I'd give it 50-50 odds of being a product-market fit just for that.
We are so incredibly far from being able to build a sustainable colony on Mars, especially at a realistic cost, that it makes no sense as a product goal. It is a fun thought experiment and an inspiring goal for many though, which I think is the real motivation for focusing on it so much.
Elon is undoubtedly great at getting folks to commit money and talent to his companies, and talking about plausible-ish things like becoming a multiplanetary species is one way he accomplishes that.
> We are so incredibly far from being able to build a sustainable colony on Mars, especially at a realistic cost, that it makes no sense as a product goal.
"Dying on Mars, just not on impact" is Musk's final bucket list item. Almost everything else he does is to enable that vision, either directly by creating the tech, or indirectly because he knows this is expensive.
He may well fail, nobody's ever done this and we don't know how many surprises there will be.
But the ship working well enough for $200k tickets is plausible.
(The idea that banks will give people loans for that, not so much: without multi-planetary trade, nothing that happens on Mars can repay a debt on Earth, and I don't see Mars as having any special economic benefits to make such trade worthwhile).
Wikipedia splits induced demand into "latent demand" and "generated demand". I think Elon has no trouble with the idea of latent demand and that by lowering the costs of space travel more will do it. The issue is generated demand, it is a bit irrational to think that a person with no desire for space travel in the first place will say "oh look, space travel is cheap, let's make a satellite". The general story is startups find market fit or they die. You have to find the customers, it is not like you make a product and everyone changes their desires to conform.
> it is a bit irrational to think that a person with no desire for space travel in the first place will say "oh look, space travel is cheap, let's make a satellite".
They won't make a satellite but they will demand things which middlemen can solve with a satellite.
> You have to find the customers, it is not like you make a product and everyone changes their desires to conform.
Once smartphones were invented, people found within themselves the desire for a smartphone.
So-called "induced demand" is just a dumbing down of the more fundamental notion of supply and demand, for people who aren't comfortable thinking about math, calculus, dynamic equilibria, etc. If you read the wikipedia article on it, you'll see they constantly describe it in terms of supply and demand. The term was originally "defined" in 1999 in a paper that was not written by economists. It's not an economics term.
in terms of transportation planning, a better way to think about it is, "misery distributes itself throughout the system".
A large enough change in scale manifests as a change in kind.
As a topical example, SpaceX is trying to reduce launch costs by 20x with Starship, which just had its 4th test flight this morning. Some don't see the point: there's not nearly enough demand to launch thousands of tons into orbit per year. But 20x is a lot cheaper, so they're banking on induced demand expanding the kinds of projects that send things to space.