A “Flock” of Planet Labs satellites awaiting launch. The company says it practices “agile aerospace” by rapidly iterating on its satellite designs, in much the same was as a more conventional technology company. (credit: Planet Labs)

The startup-ification of commercial space

by Jeff Foust
Monday, September 8, 2014

It’s a scene that plays out regularly in Silicon Valley and other high-tech centers: creating a startup in a weekend. On a Friday evening in late July, several dozen people gathered at a hotel in San Jose, some with ideas looking for people to implement them, and others with skills looking to put them to use on interesting ideas. After an evening of matchmaking and organizing, several teams emerged with concepts for businesses to develop. By Sunday afternoon, those teams would present their plans—and, in some cases, initial versions of their products—to judges.

These would-be entrepreneurs, though, weren’t developing mobile apps or social networks. Instead, attendees of Startup Weekend Space were looking to develop space businesses. The opening evening of the event took place in conjunction with the NewSpace 2014 conference held by the Space Frontier Foundation, although there was only a little overlap with conference attendees.

After a brief keynote from Esther Dyson and some icebreakers, participants then pitched ideas to each other and started to build teams. Some of the ideas were whimsical: one person, tongue in cheek, suggested using space debris “tactically” for defense applications. Other, more serious proposals focused on smallsats, 3-D printing, and technologies to mitigate space debris. By the end of the evening, participants coalesced around ten teams. The winning team, BioCube, plans to develop life support systems for biological experiments on CubeSat-class spacecraft.

Startup Weekend Space is just one sign of a shift in the development of commercial space ventures. When the new wave of entrepreneurial, or NewSpace, companies emerged in the early 2000s, people pinned their hopes on a handful of companies with wealthy founders: SpaceX’s Elon Musk, Virgin Galactic’s Sir Richard Branson, Blue Origin’s Jeff Bezos, and so on. While some NewSpace companies have made progress without such backers—companies like Masten Space Systems and XCOR Aerospace, which have relied on smaller “angel” investors—they have been the exception to the rule.

Today, though, they have gone from the exception to the rule. Many space startups are looking increasing like other startups that populate Silicon Valley and other technology centers. They consist of small teams that leverage existing technologies and capabilities with their own innovations—both technical and market-driven—to rapidly develop new products and services. These companies have also increasingly been able to tap into funding from venture capitalists (VCs) to help grow their businesses.

It’s not surprising that many of this new wave of startups look more like typical Silicon Valley startups than space companies. Skybox Imaging presented itself not as a developer of high-resolution imaging satellites—which it is—but as a company providing imagery combined with other data to serve various industries. Skybox received more than $90 million in VC funding and, this summer, was acquired by Google for $500 million (see “The commercial remote sensing boom”, The Space Review, June 16, 2014).

Planet Labs, which also develops smallsats for remote sensing applications, has raised more than $60 million from VCs. It’s adopted another approach of technology companies: rapidly iterating its spacecraft designs to incorporate new components on timescales of months, rather than years as has been more typical in aerospace. “This is agile aerospace,” Planet Labs president and COO Robbie Schingler said in July, before the company’s latest batch of satellites launched. “It’s about more launches and more satellites, but it’s really about getting rich data.” The company has frequently repeated that “agile aerospace” theme in recent months.

Others are following in their footsteps in both their technology approach and access to VC funding. In late July, NanoSatisfi announced a $25-million funding round from several VCs. The company, rebranded as Spire, plans to launch dozens of CubeSat-class spacecraft over the next couple of years to support ship tracking and other maritime applications (see “Small satellites, small launchers, big business?”, The Space Review, August 11, 2014). Rocket Labs Ltd, a US-New Zealand company, has raising funding from Khosla Ventures, a VC that also backed Skybox Imaging, to support its work on a smallsat launcher.

So what is driving this surge of commercial space ventures? Steve Jurvetson of Draper Fisher Jurvetson, one of the first VCs to fund NewSpace ventures with investments in SpaceX and Planet Labs, believes several factors as work. In a speech at the NewSpace 2014 conference on July 25, he ticked off a number of attributes, from less expensive launch options to development of commodity hardware to the growth of global markets.

Jurvetson, like his portfolio company Planet Labs, is a believer in the concept of agile aerospace. “It allows you to iterate in a very interesting way,” he said, by flying updated spacecraft regularly, taking advantage of the latest technologies as well as to experiment. “Just launch whatever, seeing if it works, then launching another one, is a better way to go than getting it right the first time.”

“Failure has to be an option,” he continued. “If failure isn’t happening, it’s a problem.”

The “fail fast” approach is common in startups, but still a foreign one in aerospace, when conventional spacecraft take years to build and cost hundreds of millions of dollars. But if spacecraft can be built and launched quickly and inexpensively, that approach may make more sense.

That concept, though, has its limits, particularly when it comes to commercial human spaceflight. “We need to stay on top of being safe and being as diligent as possible about things that, at first blush, might be considered second thoughts in the commercial world, like quality control and process control,” said Michael Lopez-Alegria, the outgoing president of the Commercial Spaceflight Federation, in a July 24 panel at NewSpace 2014.

The entrepreneurial space industry, despite these developments, hasn’t lost interesting in trying to court billionaires to fund new ventures. Pete Worden, director of NASA’s Ames Research Center, recounted in a NewSpace 2014 panel a conversation with an anonymous Silicon Valley billionaire. “You know, when you have 20 or 30 billion [dollars], what do you do with that?” he recalled that individual asking. “They’re turning to space, not just to make money but as a philanthropic thing.”

“We’re seeing the emergence of a true space economy, powered by Silicon Valley entrepreneurship,” Worden said. And that, increasingly, has meant that space startups need not have billionaire backers, but instead can look a lot like the other technology startups in the landscape.

Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review. He also operates the Spacetoday.net web site and the Space Politics and NewSpace Journal weblogs. Views and opinions expressed in this article are those of the author alone.

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