Welcome to The New Space Age
Going boldly, where no company has gone before.
We expect change, progress, and growth. Since the beginning of the industrial revolution, technological and societal progress have become laws of nature, deeply embedded in the fabric of reality, at least for industrialized countries.
However, we really only expect evolutionary, and incremental change. That is, we see and accept how small improvements could logically be applied to something that currently exists, by the same people who brought us the last small improvement. Occasionally something gets a bit cheaper so more people can use it, or a new company pops up to sell us something old, but this doesn’t really suprise us either. Its normal.
We don’t expect revolutionary change. Most of us aren’t looking out for new people, ideas, and concepts that could radically change things. Part of that is because revolutionary change/innovation is too sporadic and volatile to track, but its mostly because revolutions come from small groups of people on the edges, where there isin’t a lot of money, or interest.
“…unmet needs and unexploited capabilities tend to surface first on the edge” — Lang Davidson
A revolutionary change is occurring where aerospace and Silicon Valley meet.
Unless you pay close attention to the aerospace industry (or recently venture capital), you likely didn’t notice the shift that is occurring, and the new Space Age that is being ushered in by a diverse group of people from bay area unicorn alumni to university students in India.
Colloquially referred to as “NewSpace” (short for “new space age”), these companies and people are taking advantage of new money and interest in the area, as well as advances in miniaturization of electronics, materials science, and computing to quickly democratize and advance the commercialization of space.
“It’s the Silicon Valley way of doing business: You either move very quickly and you work hard to improve your product technology, or you get destroyed by some other company” — Elon Musk
By doing what they are doing; applying the mindset outlined by Musk above, the people and companies of the new space age are disrupting aerospace. In the words of a16z founder Marc Andreessen, “Software is eating the world.”- In this case, its the part of the world once kept safe by massive barriers to entry and in-hospitable business environments. But, something beyond that is happening within NewSpace.
What’s really interesting is the other thing NewSpace is doing.
Disruptive technology was the catalayst, but the impact of NewSpace is starting to ripple out across many industries in unexpected ways. On its current trajectory, within the next few years we will see fundamental changes in the ways we collect information, communicate, feed ourselves, develop resources, govern, and live.
You might think this is far off, but it’s already happening.
Less costly and more frequent geospatial intelligence supplied by companies like SkyWatch and Ursa Space Systems have allowed hedge funds to keep better tabs on Chinese oil reserves, accurately predict Walmart earnings by the number cars in their parking lots, and get ahead of swings in argricultural commodity prices with crop health monitoring — and we are near the point where this can be done in near-real time.
Now that this sort of thing has been proven useful, the investment floodgates have started to open, funding the search for new applications and capabilities of this technology.
The Killer App
We are at an inflection point. In the last 18 months, there has been more investment in the space than in the previous 18 years, and deals are just getting bigger and more frequent. The increasing frequency of deals can be credited to launchers and earth observation, but the biggest deals have been on connectivity — disrupting the $200bn+ domestic market for satellite telecom services.
With billions in funding and 10s of billions in valuation, SpaceX and OneWeb are racing to be the first to market with a low oribit connectivity satellite constellation — providing high band-with internet and backhaul at up to 20x lower latency than GSO satellites for a negligible difference in net cost.
The domestic opportunity alone makes these constellations viable, but becuase of their polar orbits that spend half of their time over the opposite side of the earth, they’ll be able to provide low cost connectivity (and a cheap way to scale cellular networks) to Africa and SE Asia — where there are 3.5bn+ people who aren’t currently able to access our internet’s unlimited trove of information and economic opportunity.
The data and economic network effects from effectively doubling our ‘network’ are so massive they’re hard to comprehend. Over the next decades, this alone could be an incredible catalyst for global change, and growth.
The Orbital Economy
Naturally, with such incredible value to be had from satellite constellations there is a growing ecosystem of venture-backed companies competing to profit from supporting and optimizing this value creation.
Satellite servicing, de-orbiting as a service, on-orbit additive manufacturing, and dedicated small-sat launchers for satellite constellation resupply are just a few of the services in the works that will not only make the above mentioned easier and cheaper, but also enable entirely new usecases that haven’t been thought of yet — and thats just in orbit, theres an entire universe out there.
Space commercialization could be the defining phenomenon of our time.
If a small percentage of the ever growing crop of commercial space companies execute succesfully, the result could have an effect that more closely resembles what happened after we developed writing, math, the wheel, or seafaring — having the potential to bring us closer together than ever and at the same time to grow humanity’s reach exponentially.
When envisioning a world, or rather a star system, in which these technologies have reached maturity, the result is truly something so beyond what we know now, that our current conditions will look archaic and backward.
A world where we have incredibly accurate weather prediction, precise food production, ubiquitous high-bandwidth low latency connectivity, a truly global 1st world economy, and people taking profitable steps beyond our planet could be just around the corner.
If you’ve heard anyone talking about the future of AI, or human-computer integration, or bio-tech recently, my rosy outlook might sound familiar to you. Also, if you know a thing or two about the history of people predicting how technology develops, I probably sound overly optimistic (probably true to a degree).
However, there is a very clear difference between something like AI, and space commercialization: AI, and the rest of those, are hard technical challenges, in other words we have no idea if they are actually possible in the way we envision them. Whereas, the only barriers that stand between us and a flourishing orbital economy are economic ones. The technology exists, in fact most of it is decades old. We are just figuring out how to turn it into viable businesses.
Trillion dollar rocks
Given the advances in science, social benefit, and economic growth that this New Space Age has the potential to give us, developing the space economy should clearly be a focus, but getting everyone on board is a slow process.
This problem is evidenced by the fact that while investment per company in NewSpace is high because of the high upfront cost of doing business, overall investment compared to economic opportunity is orders of magnitude lower than the Tech industry. For some reason the market thinks messaging apps for teenagers and rehashed concepts with AI tacked on to the end of them are worth more than basically unlimited undeveloped resources.
To change this we need more people from other industries to bring their unique expertise and get involved in this revolution, we need more general awareness of the impact commercial space could have, and we need more investment into more viable ideas.
If this inspires you, whether or not you think you have something to bring to the table, don’t just sit on the slide lines. Get involved, and figure out how to make an impact.
Disclosure: My statements and opinions are my own, and do not represent those of any organization with which I am associated.
Also I am by no means an authority on anything. I’m just a guy with a computer, so don’t take anything I say too seriously.
