Why Im Excited About Space 2.0
Many of the most important tech companies over the last several decades rose to prominence in large part due to the fact that the infrastructure they were built upon drastically dropped in price.
In the 80’s Microsoft, SAP, Oracle and others became tech giants because computer costs had plummeted making it affordable for every employee and household to own one. In the 2000s, the internet made content distribution effectively free which led to rise of Facebook, Amazon, Netflix, AirBnB, Salesforce, etc.. By the end of the decade, price declines in sensors aided the smart phone in becoming ubiquitous around the world. This allowed Uber, Instagram, WeChat, etc.. to build the latest generation of great tech companies on top of the smart phone platform.
Which begs the question, with satellites dropping significantly in price to both build and launch, could the next big tech company come from the aerospace industry?
The recent advent of reusable rockets is drastically cutting the cost of sending satellites into space and the miniaturization of satellites is making them much cheaper to build. Add in the potential for mass production of satellites and costs could be slashed even further. In the last five years, the cost to launch a small payload into low-Earth orbit has been reduced by 90% and the costs to build many of the satellites has been reduced by over 10X. “Smallsats,” Microsatellites and “CubeSats” offer the advantage of low cost (tens to hundreds of thousands of dollars) and short production schedules (on the order of months and sometimes even weeks).
To make this even more interesting, this shift is propelled by the private sector as commercial launches are accelerating in number. The number of commercial launches now rivals that by government agencies and is expected to outpace government agencies in coming years. In fact, NASA is becoming more reliant on private space companies such as SpaceX and Orbital AKT to carry out its missions because it saves the organization hundreds of millions of dollars.
A recent report compared the commercial and government rockets in development to find how much it will cost both fleets to reach 500,000 kilograms of launch capacity. The results show that by 2025 it will cost $6.6 billion for government rockets and $4.2 billion for commercial rockets — or $2.4 billion less for the private sector (1). As this happens, the space industry will continue to move away from being an industry dominated by government agencies to an industry run by commercial businesses.
The result of this drastic drop in price and the privatization of the industry will be a massive increase in the number satellites launched over the next decade. There are roughly 2,000 satellites orbiting Earth today with a significant portion of those having launched in the last few years.2 The number of satellites that will be in orbit over the next decade will likely 3–5x the current number as many expect the US to deploy over 3,000 satellites alone during that time.
This is potentially a profound development because more satellites mean more data. Over the next several years, the largest untapped data source in the world will come from space.
Space and aerial observation platforms already produce petabytes of signal data daily including images, thermal bands, RF signals, radar data and more. Today, analyzing geospatial and orbital data is mostly a manual, inefficient effort done by geospatial and orbital analysts who strain their eyes over computer screens, manually looking for anomalies within images and other signals to find indicative subsets that will unlock valuable insights.
And that amount of data will only grow exponentially in the coming years as more satellites are put into orbit. Current methods and solutions, which are already strained, won’t be able to keep up with the explosion of data. This is where AI and ML can really be beneficial and unlock whole new set of use cases that were never possible before.
While it is impossible to know all the potential applications this new data will allow companies to build, there are a number of exciting possibilities.
- Internet Bandwidth — Demand for internet connectivity at sea and in remote geographic locations is propelling investment in low and medium Earth orbit satellite constellations. Launching networks of satellites that offer broadband Internet service will help to drive down the cost of data, just as demand for that connectivity is growing due to increased mobile usage, autonomous cars, the Internet of things, artificial intelligence, virtual reality, augmented reality and video.
- Defense — the military is more accustomed to using satellite imagery than any other customer segment. However, advancements made in the private sector with regards to AI, machine learning, and computer vision could further the capabilities of the defense sector making them ideal first customers.
- Insurance — not only would the use of aerial imaging make for safer, more accurate inspection of insurance claims, insurance companies could monitor their assets over time for subtle changes and spot potential liabilities before an issue arises. This has the potential to save insurers and customers significant amounts of money.
- Financial services — Hedge funds are already using satellite imaging to count cars in parking lots or foot traffic in malls as a proxy for how well certain retail stores will do in an upcoming quarter. This capability has the potential to expand to other aspects of the financial industry including equity analysts, commodity traders, and more.
- Disaster response and relief — analyzing aerial imaging in disaster zones has shown the ability to provide first responders with better info in real time such as where flooding is the deepest, optimal routes to travel, where to set up staging areas, and more thereby allowing rescue and relief missions to be more effective.
- Supply Chain management — the ability to monitor traffic in and out of ports, track trucks, planes, and ships to provide real time data on when products will arrive, or analyze leading factors to help determine supply and demand needs, satellite data has the potential to further increase efficiencies throughout the entire supply chain.
- Agricultural — aerial imaging can not only track the progress of crops and therefor predict harvest yields, it can be used to analyze the health of the crops in real time allowing farmers to use water more efficiently, minimize loss from plant diseases, and spot many warning signs before they become major problems.
- Traffic and road repairs — cities could leverage satellite imaging to better manage traffic patterns, spot the most critical infrastructure in need of repair, and measure pedestrian traffic to design cities in a more accommodating fashion. The advent of driverless cars and the need to communicate traffic flows to each vehicle could leverage aerial images as yet another source of data autonomous cars use to ensure safety.
- Energy production — as demand for resources continues to increase, aerial analysis and measuring of oil levels in containers across the world could enable the ability to better predict energy demand, price fluctuations, and supply levels.
- Real estate and building construction — the use of satellite data could have a profound effect on the real estate and construction businesses as real time monitoring of construction projects could make coordination more efficient. Data could also be leveraged by real estate investors to better understand where new construction is happening and which locations to invest in next.
- Security — with all this valuable data being generated and transmitted back down to earth, the need for securing the satellites and data transfers will be paramount. I imagine the next frontier of cyber security will occur in space.
I don’t have all the answers to what applications will be created because of new data and capabilities, but I fully anticipate that part of the next wave of great tech companies will be built on data collected from space.
(2) https://www.ucsusa.org/nuclear-weapons/space-weapons/satellite-database
