Many get into the space industry seeking to pursue interesting technologies, like reusable rockets; a sustainable business plan is only a secondary concern. (credit: SpaceX)

Space entrepreneurs need to look to the stars but keep their feet on the ground

by Nicholas Borroz
Monday, October 12, 2020

The space sector is one where technological marvels are widely celebrated. As private firms become more influential in the sector, there has been a veritable explosion of exciting plans for employing next-generation technologies. This creativity is inspiring, but it also has drawbacks. Entrepreneurs should continue pursuing their visions, but they should also make sure to ground their enterprises in reality. They should clearly understand how their activities benefit others.

The space sector is dominated by intrinsically motivated people: they are passionate about advancing engagement with space. Intrinsically motivated entrepreneurialism, which is just one sort of entrepreneurialism, means the drive to innovate comes from love for the product or service being developed; the focus is on a technology rather than on its applications. Such intrinsic motivation has positive and negative aspects. Positive aspects include being visionary, imaginative, and inventive. Negative aspects include being quixotic, impractical, and obsessive.

Another sort of entrepreneurialism, extrinsically motivated entrepreneurialism, is different: it comes from assessing market demand and developing products or services to meet that demand. The archetype here is a businessperson who invents solutions because selling them will yield profits, not the mad scientist in the basement zealously committed to creating futuristic satellites. Positive aspects of extrinsic motivation include pragmatism, success, and savviness. Negative aspects include being dispassionate, materialistic, and cutthroat.

In the space sector, there is a preponderance of intrinsically motivated individuals. The high levels of intrinsic motivation are particularly obvious to individuals who come from outside the sector. If one has spent a career attending conferences in another sector and then attends a space event, for instance, the passion is palpable. There is a contagious thrill about the wondrousness of the sector. What possibilities will be unlocked by technological wizardry coming online: reusable rockets, space debris removal, and onboard computing, for instance?

One often gets the distinct impression that slide decks are post-hoc justifications to convince investors of business viability; there is passion for a technology, and then a business case must follow. This is decidedly different from many other sectors. In the oil sector, for example, one rarely feels that slide decks have been created as post-hoc justifications. There are few oil entrepreneurs who want to create new extraction technologies simply because they are passionate about doing so. The order of causality flows the other way: oil companies pursue profit, and technological innovation is developed to enable profitmaking.

Why does the space sector have so much intrinsic motivation? The answer is debatable, but two potential reasons stand out. One reason is that, in their hearts, many space professionals are fueled by a desire to see humanity become a multiplanetary species. It doesn’t take long, especially once the investors have left the room, for discussions to transpire about the importance of space exploration, or for debates to emerge about favorite sci-fi inspirations.

A second reason is that the space sector has traditionally been dominated by engineers and scientists, who naturally focus more on technologies than applications. Engineers and scientists are technology-focused in many sectors, not just the space sector. To cite the oil industry again, scientists studying subsurface deposits and engineers devising ways to extract them are not focused on profitability; the job of translating their technological innovation into profits is for the business development teams.

Whatever the reasons may be, the space sector is marked by high levels of intrinsic motivation, which can be problematic for a few reasons. First, intrinsic motivation threatens profitmaking. When one develops technologies for their own sake, without seriously thinking about the demand that exists (or does not) for those technologies, this undermines the viability of business plans. An important task for any entrepreneur is to make a case that returns on investment will justify current expenditures. Forcing a dream to fit into a business plan can be complicated.

Second, intrinsic motivation is problematic because it undermines societal support for the space sector. It is easy to forget when talking to other space enthusiasts that much of society has little interest in space. Yes, space technologies have become regular parts of most people’s lives (e.g. geotagged Instagram posts), but for much of society, the sector seems fantastical. “Why invest in space?” non-space enthusiasts often ask. Space entrepreneurs exacerbate this disconnect by focusing on technologies that do not have clearly relevant applications.

The third problem with intrinsic motivation relates to the first two: it stalls humanity’s engagement with space. If there is little money to be made in space, and if the rest of society sees the sector as having questionable importance, then this slows humanity’s advancement beyond Earth. Fundamentally, for engagement with space to advance, there must be widespread interest in doing so; this interest must exist for members of society who are not already space enthusiasts. There must be money to made in space, and going off-planet must also yield valuable products and services. If this happens, engagement will advance more quickly.

To return to the argument made at the start of this article: space entrepreneurs should be more extrinsically motivated. In a nutshell, this means they should pay more attention to market signals and use this awareness to inform the development of technological solutions that clearly address problems people care about. No matter where entrepreneurs are along the value chain—be it in launch vehicles, platforms, payloads, communications, or analytics—they should have a clear understanding of how it ultimately ties back to consumer demand. Space technology is, after all, simply an enabler of solutions to problems. An inspirational motto for the launch services firm Rocket Lab is: “We go to space to improve life on Earth.” A phrase like that should be in the back of the minds of all space entrepreneurs.

To be clear, this does not mean jettisoning intrinsic motivation entirely! The joy of working in the space sector, especially when compared to other sectors, is its passion. It is where visionaries realize outlandish ideas that have profound implications for humanity’s future. This makes working in the sector not only important, but also fun. Space entrepreneurs should certainly keep their eyes to the stars. The point is they should also make sure to keep their feet on the ground.

Nicholas Borroz is a space sector consultant, manages the website Filling Space, and is completing his PhD in international business.

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