A new vector to space
Announcing Lightspeed’s investment in Vector, a revolutionary launch platform for the small satellite industry.
Humans have marveled at the night sky since pre-history. Scientists have even found surprisingly accurate, 17,000-year old “star maps” painted on cave walls by our ancestors:
Yet, our direct experience with space started only 60 years ago. In 1957, Russia launched Sputnik 1, the first artificial satellite, into low earth orbit. Our fascination with space gave way to an arms race between the U.S. and Russia. Space domination became a strategic, military objective, and the following decades of space innovation were largely driven by this dynamic.
As the Cold War died out, the world realized that space was also a massive business opportunity. The modern satellite industry today generates over $200B of revenues globally. Over 1,300 satellites are currently in operation. They provide a host of essential services including communications, earth observation, navigation, meteorology, and more. The GPS in your phone, your local weather report, perhaps the TV you watch at home — none of these would be possible without satellites.
At Lightspeed, we think the business of space is just getting started. That’s why I am pleased to announce our Series A investment in Vector, alongside our friends at Sequoia Capital and Shasta Ventures.
Our conviction in Vector stems from decades of investing in the computer industry and the parallel trends we see in space technology. The satellite industry of the 1990’s looked like the computing industry of the 1960’s. Like a 1960 mainframe computer, these satellites were expensive, monolithic machines that were hardwired to do only one job. Typically over 1,000 kg, they operated in geosynchronous orbit (GEO, 26,200 miles). Big rockets were required to push them out into space. The cost of failure was high, and the number of opportunities to launch was scarce.
Over the last decade, constellations of small satellites (<300 kg) operating in low earth orbit (LEO, 100–1,200 miles) are starting to do the job of those monolithic GEO satellites. LEO is an order of magnitude closer to earth, so launch costs and communications latency are lower. These constellations of small satellites are analogous to the modern data center, which is characterized by a distributed network of cheap computers running software-defined workloads. Driven by Moore’s law for their component electronics, the cost of these small satellites is already declining aggressively — nearly 10x over the last decade.
The most extreme example of satellite miniaturization is the CubeSat reference design — a 10x10x10 cm cube weighing <1 kg. A network of these CubeSats has the potential to perform similar services to larger satellites today.
While satellite technology has evolved significantly, access to space remains a major bottleneck to the growth of the small satellite industry. In 2016, only 85 orbital launches were attempted globally, and that was the 3rd highest year since 2000. Some estimate actual demand is more than 3x this current capacity.
With so few launches, it is only natural for launch providers to focus on customers with very large, expensive satellites who can pay hundreds of millions of dollars for access to space. The current competitive dynamic between launch providers favors those who can launch the largest payload to a given orbit on a single rocket. SpaceX claims its Falcon Heavy will lead the industry on this metric, and at a slightly lower cost:
With only these massive launch vehicles at their disposal, small satellite companies are forced to “hitch a ride” as a secondary payload. Their orbital placement, launch timing, and even performance in space are all affected by the lack of a dedicated launch vehicle. There is clearly a hole in the market for a launch vehicle specifically designed for small satellites.
Vector exists to fill this hole. Its goal is to build the most reliable, affordable, and accessible gateway to space for small satellites.
Vector has taken an approach to rocketry that is unique for the launch services industry. Usually, in rockets, bigger is better. By rocket standards, Vector’s products are tiny. HBS professor Clay Christensen (author of The Innovator’s Dilemma) would say Vector’s products are a “low-end disruption” to the launch vehicle industry.
The smaller Vector rocket is designed to launch 100 times per year for payloads of up to 50 kg. That’s more launches than the entire industry today, but on a single platform. At a $1.5–2.0M price point, Vector is price competitive with secondary launches, but with the obvious customer advantages of selecting your own launch timing, orbital characteristics, and more. Because of its small form factor (and a few other smart design choices), Vector is not limited to legacy launch pads and has more flexibility over launch timing. In fact, a Vector rocket can be towed by a single pickup truck and transported like a typical piece of cargo:
Vector has also developed its own satellite platform called GalacticSky. It enables customers to deploy applications on virtual, software-defined LEO satellites. The virtual machines hosting those applications can move horizontally one from satellite to another, based on time, orbit, and even potential hardware failures. At scale, a distributed network of GalacticSky satellites should be able to deliver the functionality of a high cost, GEO satellite through the coordination of multiple, low cost LEO satellites. In short, GalacticSky is cloud computing, above the clouds!
We are excited to embark on this journey with the Vector team, to help open up access to space for businesses around the world. Onwards, and upwards (literally)!
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