With large cash needs, long development cycles, significant regulations, limited liquidity opportunities and a lack of businesses started in student’s dorm rooms, entrepreneurs face significant hurdles starting a business in this industry. So how can New Space change this paradigm? Or if that is too daunting a question to solve in one blog post, what businesses/organization can be started that would defy these industry norms and encourage the industry to behave more like an internet startup?
Here is one humble idea.
The Space Industry needs an App Store similar to the one Apple created for iPhone and iPod applications or Google is creating for its phones. Similar to the way apps have spurred the development of a new “app entrepreneur” for software, such a store would serve as a marketplace for small space-related components that could then be integrated to create larger Space products. What could these components look like? Components are anything from a motherboard to a high def camera to an ozone monitor to a vibration monitor, to a battery, to a live specimen container, to a star tracker, to a solar sail for a CubeSat. Here is how an app store could help the industry look more like Silicon Valley:
1 – Low Barriers to Entry: 3rd party businesses could be created developing only components for the Space App Store similar to businesses created that only make Apps for Apple’s App Store. The capital and expertise to develop one component would be significantly less than the capital and expertise necessary to develop full vehicles.
2 – Many Exit Strategies: Since these components could be brought to market relatively quickly, these small component companies would generate revenue earlier than those firms developing full systems. Earlier revenue usually equals more cash on hand and cash is a business’s life blood. Earlier revenue could generate more opportunities for these component companies to be sold increasing investor liquidity opportunities and creating industry momentum.
3 – Competing Firms: Low barriers to entry, low capital requirements, short time to market: all ingredients for competition. Incidentally, increasing the number of competing firms may increase liquidity event opportunities as well (see #2 above).
4 – University Participation: A subset of the components offered at the Space App Store could be CubeSat or CubeLab components. Utilizing the free or discounted labor, Universities could offer some of their more unique CubeSat components for sale. Having spoken with Aerospace professors for past posts on this blog, one of their biggest concerns is maintaining adequate funding levels to make satellite manufacturing a regular part of the curiculum instead of a special project which could be afforded twice a decade. An additional revenue stream from components sold on the app store could be an incentive for these universities to participate with the app store.
5 – Young People’s participation: Although hardware will probably always be harder to develop than internet software, Aerospace students would be able to break large systems down into small pieces (components) to offer their creations on the Space App Store. The assumption is that shortening the time from idea to market will increase student/young professional participation since students would be able to more easily see the results from their efforts. The Space App Store would provide a market for those student-built components. I expect strong synergy between #4 and #5. In addition to the Space App Store helping universities by adding a revenue stream, universities could also help their students by validating student-owned components on their CubeSat/CubeLab missions (validation is so critical, see more on this further down in the blog).
6 – Short Product Dev Cycles: Components could be brought to market much faster than whole systems. Perhaps in months instead of years.
7 – Low Government Regulations: Maybe not. Any one business may not be able to change the nature of what is being sold or how the government views these products. However, duplicating how the CubeSat standard was rolled out to the world may serve as a model for the Space App Store to follow. CubeSats have already passed significant ITAR hurdles and international universities and companies are building their own CubeSats based on this standard. The app store could help facilitate the development of similar standards to the CubeSat for the benefit of the whole community.
For an Space App Store to work, here are a few prerequisites:
1. Standards. Apple provided software developers both the standard “bus” (the iPhone or iPod hardware) and the standards for how to integrate with that bus (the STK). Although there is a propensity within the space industry to design everything from scratch, CubeSats and the CubeLab standards have been well received by both industry and universities, both within the US and internationally. CubeSats could point the way for new standards to come. Good standards define the edges and the connections freeing developers to focus their creativity. But wait, you tell me, “It will take years to agree to industry-wide standards for larger satellites, launch vehicles, or other space related hardware.” Okay, so let’s start with Cubesats and CubeLabs and grow from there. With success (and profit) from these smaller standards, standards could grow to include ever larger satellite Buses and experiment buses. As I mentioned in this post, I encourage Bob Twiggs of Kentucky Space to grow his CubeLab experiment Bus to include larger sizes. The same can work for CubeSats as well. For long-term success, the Space App Store must make standards creation a strong priority.
2. Manufacturers. “But who builds all of these components?” If every component designer wanting to leverage the Space App Store needed first to invest in the expensive equipment necessary to manufacture their own components, the benefit to universities and young startups is greatly reduced (larger capital needs, slower to market, etc.). Who would participate in the Space App Store with that kind of barrier to entry!? The other extreme would be to manufacture nothing and just sell glorified CAD drawings. But that would just transfer the manufacturing responsibility from seller to buyer and the demand for Space App Store's products would be greatly reduced. Plus if one sold the CAD drawings one would have the issue of intellectual property rights, product liability, etc. Instead, I envision two Manufacturing Methods for the Space App Store developing:
- Utilize existing manufactures offering their own products. In the early days of the Space App Store this may be the only option. Understandably this would limit those components offered on the Space App Store to those manufactured by companies with existing manufacturing equipment and skills.
- Develop a cadre of in-house manufacturers willing to manufacture the designs of others. Components would need to comply with a set of quality criteria (perhaps including on-orbit verification, but more on that below). In some cases, the manufacturer may wait to create your component until you place the order at the Space App Store (see just in time manufacturing). In other cases, the manufacturer may have several on hand for immediate shipping. The Space App Store approved manufacturers would sign appropriate paperwork ensuring the component creator’s secret sauce would not be stolen by the manufacturer - protecting IP. I see a dual benefit with this model: (1) The component entrepreneur benefits by avoiding the up-front manufacturing costs. (2) The young manufacturer benefits by increasing his revenue.
3. Component Validation. How do we know the components offered on the Space App Store are going to work as advertised? This is a big risk. Launch opportunities can be expensive with limited launch windows (wait times for Cube Sats can be as long as seven years). Space App Store users need to know every product offered at the Space App Store will work correctly. Here are a few ways to promote quality products:
- Only allow products that have flown in space to be offered. Here is where Universities could really step it up for the benefit of their students. In addition to the university flying their own components (built by students), by flying components designed and built by students, Twenty-two year olds could be starting their own Space App Store developing companies offering their flight-proven components via the Space App Store.
- Offer a testing service via the Space App Store to validate component functionality in a simulated space environment (maybe certs for LEO/GEO/Moon/Others?). I could see a great partnership blossoming with Zero-G and their new research service.
Example #1. Cornell has taken the cubesat model and added a new component for attitude control called “flux-pinning” See video below.
Assuming their experiment is successful on orbit, Cornell could utilize the cadre of App Store manufactures to offer this technology to a wider App Store marketplace. Now any authorized university or private company could purchase “flux-pinning” units for their attitude control while bringing in revenue for both Cornell and the App Store manufacturers. And what of the students that participated in this mission during undergraduate or graduate studies at Cornell? Are they not well positioned to take their knowledge and start companies of their own offering competing flux-pinning products competing against their own alma mater?
Example #2. This video shows how one group of students used the LEGO programming language, an iPhone, and $3600 to develop a working satellite. Imagine if this group could profit from their innovations. What a virtuous cycle this could be. Profits from App Store sales could spur on further innovation by this group of students.
It all comes back to Standards, Manufacturers, and Validation. I could see one model where the users of the App Store could make recommendations to a standards board to influence new standards being considered by the group, make requests for components they would like to see designers create, rate component designers and manufacturers, and help design component validation requirements.
Could such a system really change space development as I have outlined? Thoughts?
