The Inflection Point

  • Russia’s early lead: Sputnik 1 - world’s first artificial satellite, Yuri Gagarin - first human in space
  • US takes over – 1969 Apollo 11 astronauts Neil Armstrong and Buzz Aldrin plant US flag on the Moon, bursts terrestial bonds and began exploration of space, no visible limits to man’s future in the universe
  • NASA’s budget cuts – from a peak of 4.4% of the federal budget to averaging 0.5% in the past decade
  • Two proposals: Space Transportation System, a space shuttle, and ISS – both coupled in the sense that one cannot exist without the other – soon falls through because of inaccurate estimates, bureaucracy, and eventually extremely high cost of getting in space (~$1B)
  • Bush in 2004, promotes private companies to enter the sector, design vehicles capable of bringing cargo to ISS, deliver cargo
  • COTS Program: 1) traditional cost-plus –> fixed cost model promoting cost efficiency; 2) oversight –> insight by NASA; 3) NASA became one customer among many, allowing companies to keep IP for their tech

Blue Origin

  • Motivation: solar system can support trillions of humans and if we had trillion humans we would have a thousand Einsteins and a thousand Mozarts, space alone held promise of unlimited resources and energy, thus unlimited potential for humanity
  • Criticised for not participating in NASA proposals (vs SpaceX) because of long-term thinking and Bezos’ funding resources (he was a billionaire when he started)
  • Acted more as a philanthopic nonprofit rather than a startup –> soon realized mistakes

SpaceX

  • Driven cost of launching down by 90%; $62M per launch or $2800 per kg ~ 5% of what it cost the shuttle –> launching is the first step to building anything in space
  • Proven market-oriented approach to space can work; most valuable private company
  • Musk realized we needed a Moore’s law in space: cost per pound to space is constantly decreasing
  • Ideology: Failure is an option here. Learn from failure, improve the prototype and test it again
  • 6 years of failed attempts and 3 failed launches –> 4th attempt was successful, and the company took off
  • Four ingredients of success:
    • Iteration: became famous for blowing up things, came up with the simplest, lightest and cheapest solution, removing all overengineered parts (for reliablity), published a video compilation of failures, risk-embracing combined with Musk’s sense of urgency
    • Vertical Integration: brought production of critical components – especially those central to the performance or requiring high rates of iteration – in-house and buy off-the-shelf where cost-vs-performance favoured, ~70% of components were in-house
    • Economies of Scale: designed reusable rockets, virtuous cycle of lower costs leading to greater demand allowing more efficient scales
    • Culture: single mission: reaching Mars while others tried winning contracts, engineers at all levels are responsible for developing part of the rocket or its engines, not told how to do it, just expected to work tirelessly and make it happen, attracts the best of the best
  • Two key drivers:
    • Starlink: constellation of LEO satellites (initially ~60) to provide low-latency, high bandwidth global broadband internet targeting rural communities and areas with low connectivity, motivation for Starlink was to fund going to Mars
    • Starship: Three ways in which it is revolutionizing space (both needing each other):
      • Size: James Webb Space Telescope (JWST) has autonomous unfolding which is an engineering marvel but investment worth millions which would have not been required if we had Starship
      • Fully Reuasable: Cylindrical firsst stage booster and winged upper stage which is designed to be refueled in space
      • Launch Costs: $200 per kg (~99% lower compared to the Shuttle), once operational can increase cadence to 3/day, lofting 15M kgs into orbit in an year, introducing completely new usecases like high-speed point-to-point travel, etc.
  • One the demand-supply curve, lower the cost means shifting the equilibrium line – the total gain to the society is measured by the gain in area under the demand-supply curve

    Why do talented people want to work in space and start revolutionary companies? It’s because they want to devote their talents and efforts to a vision bigger than any other, a vision for a future of unlimited opportunity. If space business wasn’t about those visions, it would truly be just another (very hard) business, and those talents and efforts go elsewhere. Efforts like SpaceX attract the brightest, most innovative minds and to combine them – in an effort that is bold enough and challenging enough to make the most of their talents and efforts – is inseparable from the authentic commitment to having goals like Mars in sight. If chosen well, such an ambitious goal directs those talents and efforts toward advancing technologies and business models that generate value along the way, today.

Planet

  • Building and deploying a fleet of smaller and cheaper satellites to image the Earth in new and value-generating ways
  • Three key categories of data: 1) low resolution continuous image of all of the Earth’s surface; 2) higher resolution imagery for specific locations up to ten times per day; 3) an archive of thousands of images for each point on Earth that Planet’s satellites had captured over the previous decade
  • Chatelier principle: Companies reorganize themselves in response to a cheaper input, demanding more of it over time not only because it’s cheaper but also because they get better at using it. If we give the market some time to adjust, the demand curve may become less steep as companies rejigger their operations to make most of the cheaper input costs
  • Key lessons from this principle: 1) we shouldn’t be surprised that early demand for Planet’s data falls short of what we might anticipate in the long run (we tend to overestimate the role of tech in the shorter term and underestimate in the longer run); 2) Planet, like every space company, can play an active role in speeding up that adjustment process
  • Constellations uses a tech that measures the distortion of GPS signals as they pass through the atmosphere, revealing information about temperature, pressure, water vaporm and more to improve forecast accuracy and better predict extreme weather events
  • In the same way that every company is today is a tech company, the need for persistent global monitoring and coordination will see every company of tomorrow be a space company

Stations

  • Objects in orbit experience microgravity, a state of weightlessness – its not because gravity is weaker in orbit, a common misconception (it’s 90% that on the surface), but objects are moving so fast that they’re in perpetual free fall around the planet
    • Microgravity removes convection, sedimentation, and buoyancy that warp and disrupt physical and chemical processes
    • Diffusion becomes dominant process – a gentler mixing that enables perfect, uniform, and precise structures at the atomic level
    • Possible to create larger, purer materials (fiber optic cables, semiconductors, protein crystals for pharma) and use 3d printing to create delicate and complex structures that requires buttressing in our gravity (artificial organs)
  • Harvest resources from asteroids or the Moon, harnessing solar power from space – space stations could be where we manufacture rocket fuel, satellites, and spacecraft
  • ISS –> cost $4 billion in annual upkeep on top of the estimated $100 billion for initial construction – half of NASA’s annual budget
  • Axiom
    • Build habitat modules that would attach to ISS in 2026
    • Customers: 1) dozen of nations with space agencies, 2) bring cloud computing to its station, 3) space tourism industry by offering a destination as well as a flight
  • Space station competition: Northrop Grumman (govt. customers, flight proved systems), Starlab led by Voyager Space, Nanoracks, Lockheed Martin (replaced by Airbus) (first science park in space), Orbital Reef led by Blue Origin and partners like Boeing (mixed use business park)
  • Currently financially not viable – no customers –> no business usecase –> no stations and no stations –> no usecase for figuring out how to use them
  • Le Chatelier principle: commercial space stations –> invent new ways to use them
  • Opportunities:
    • ISS offerred free but limited option for decades – once retired the obstacle is removed and business case for commercial space station emerges
    • Problem of coordination – whole is greater than the sum, contribution to creating a whole is risky and expensive for any part –> pull parts together requires high tolerance of risk, long investment horizons, and someone to make it happen
  • Why its different this time around?
    1. Never been a private sector push for commercial space station at the scale and scope we’re seeing today, each concept is designed with commericial applications in mind that will build on NASA’s foundation support
    2. Lauches to orbit are becoming cheaper and more avilable than ever – trends likely to continue – economics of building and supplying space stations is becoming less forbiding. Competition will push each team to find attractive use cases – keep costs low, incorporate latest technologies, and work with broad set of private sector partners
    3. Presence of China’s Tiangong gives US commerical stations geopolitical tailwinds
    4. Growing ecosystem of complementary technologies – including reentry vehicles, small scale orbital R&D experiments, in-space connectivity, and computing (e.g., Varda Space Industries –autonomous one-meter diameter capsule that conduct R&D and manufacturing of pharma components)
  • Commericial revolution –> two dreams: we would not just go to space, but also go to stay

Artemis

  • Series of missions that will return humans to the Moon for the first time in over half a century
  • Initial plans: rover, mobile home, stationary cabin, several small camps – scientific and commercial R&D
  • Lunar south pole: potenially hundreds of kgs of frozen water – can be converted to rocket fuel
  • Moon focused companies:
    • Provide basic infra on Moon (3d printing constructions firm ICON, Crescent Space inside Lockheed Martin)
    • Transportation (Intuitive Machines, Lunar Outpost, Venturi Astrolab)
    • Mining Materials (Interlune) – isotope He-3 could be used as fuel source for nuclear fusion

Astroscale

  • Kessler syndrome: worst case scenario – domino effect causes LEO to reach a tipping point beyond collisions are ever increasing and unstoppable
  • Externalities: side effects of productive activities that aren’t reflected in prices – though operating at a scale, a level of complexity, and in an environment that make it challenging to apply conventional solutions
  • Market isn’t charging our modern space cows enough for overgrazing + essential to remove debris already in space
  • Origin of Astroscale: initial interest –> joined finance, founded IT firms –> 40th birthday –> space industry needed someone passionate about space but is from the outside –> attended conferences, chatted with experts, read 300+ journal papers –> active debris removal (ADR)
  • Strategy: 1) develop cost effective ADR, 2) business case for the tech, 3) inform and help shape international policies are space debris
  • Plans to: open “end of life” services for satellites, satellite life extension and refueling