With an estimated $1.2 trillion addressable market over the next 10 years, small satellites and the commercial space industry are booming. Here is a brief rundown from the annual space entrepreneurs confab, the SmallSat Symposium...
We’ve just wrapped up the annual SmallSat Symposium held at the Computer History Museum In Mountain View, CA. This confab of companies and industry experts was held in person for the first time in two years, and attendance exceeded pre-COVID levels. This should not be a surprise as the space and satellite industries are experiencing unprecedented growth in funding, developing, launching, and operating missions of all types. Here are a few highlights:
Surprisingly, this topic of space tourism came up in several panel discussions despite the conference’s focus on small satellites.
Now that Virgin Galatic and Blue Origin New Shepard have successfully inaugurated commercial human missions into low earth orbit, venture capital is already flowing to create a longer and more immersive space travel experience: the space hotel. It’s hard to believe, but we are at the dawn of a full-fledged space
tourism industry. Profitable business plans, including market, pricing, capital, and operating costs, were the subject of serious discussion at the symposium. LEO (low earth orbit) hotels are expected before the end of the 2020s, and Lunar tourism to follow in the late 2030s. What was once the subject of science fiction is becoming a reality.
The Small Satellite Market
A decade ago, the launch of satellites was the exclusive realm of government-funded (or subsidized) aerospace companies. Satellites were massive, 1000s of Kg, and launches were about $15,000 per kilogram (Kg). The satellites themselves cost $20M or more, and a typical single satellite mission would run $50M or more. Fast forward to today, the SmallSat/CubeSat revolution can produce a fully functional Earth Observation or Communications satellite for $100,000 to $1,000,000. A similar revolution in launch cost reduction can put a 25Kg satellite in low earth orbit for $250,000. In just over a decade, the industry has experienced a stunning cost reduction on the order of 25x to 50x. Those cost reductions have paved the way to an entirely new space market.
Here are some projections for the industry over the decade courtesy of Northern Sky Research:
The small satellite addressable market will be over $1.2 trillion
Communications and Earth Observation will generate 500,000+ Penta Bytes of traffic a day
94% of launches will be under 500Kg
Earth Observation, Science and Technology, Intelligence gathering “situational awareness missions
The Launch Cost Revolution
In just a decade, launch costs have been reduced by over a factor of 10 (See graphic). SpaceX was the original pioneer in the commercial space launch, starting with the Falcon 1 at ~$12,000 per Kg placed in orbit to the soon-to-be-launched Starship at $200 per kg.
SpaceX is not alone. Over 100 companies are attempting to succeed in the small commercial satellite launch service business. Each of these companies is optimizing its technology to service a specific launch segment in the market. Here are a few examples from the symposium starting with Virgin Orbit. Virgin Orbit uses a Boeing 747 as a reusable first stage, and an expendable rocket launched from under the wing places the satellite(s) into orbit. SPAC-funded Rocket Lab has already placed over 100 payloads into orbit based on its low-cost reusable ELECTRON launcher, and soon-to-be commissioned heavy-lift NEUTRON launcher.
European start-up Rocket Factory Augsburg is in technical trials with its staged-combustion engine and preparing for full-scale launch trials. Finally, Canadian launch company SpaceRyde uses a stratospheric balloon” to take a “custom-designed, ultra-light rocket to high altitude, where it is launched in near-vacuum conditions, avoiding the stress and costs of high-speed travel through dense layers of the atmosphere.” SpaceRyde advertises a $250,000 cost to launch a 25Kg satellite package into orbit.
Maturing Scalable End-to-End Supply Chain
Launch vehicles aren’t the only game in town. Satellites systems have a complete life cycle of operations, and an array of companies have formed to support all aspects of launching a single mission to a constellation of satellites; this includes:
Mission planning – launch and orbit planning, post-launch orbit transfer, and station keeping.
Satellite components – solar cells, batteries, attitude control, thrusters, CPUs, communications, and sensors
Satellite integration – integrating and testing the satellite, ensuring it is ready for launch
Ground stations and management – So you launched a satellite, how are you getting your communications or sensing data to your customers?
Data storage and intelligent data processing for customer consumption – see my conference presentation Optimizing Machine Learning for Earth Observation Data
Over the last decade, satellite integration and satellite components have come of age, especially bespoke 3D printed metal RF antennas, rocket engine components,
and spacecraft mechanical parts. A decade ago, metal 3D printing was limited to a small set of aluminum alloys. Today stainless steel, titanium, and an array of mixed alloys can be fabricated with 3D additive printing systems. Innovation is not just limited to metals; composite plastics and carbon fiber printing are now possible. The 3D manufacturing revolution has drastically reduced component costs and complexity for the satellite industry. Optisys metal RF antenna printing, Airtech International large scale composite plastics, Velo-3D high-temperature titanium rocket engine components, and Burloak Technologies were among the companies represented at the conference.
Designing and building a satellite used to take years to integrate and test with most of the sub-assemblies requiring custom design. Today, using off-the-shelf CubeSat components, third-party satellite integration companies can integrate and test a satellite from concept to launch in months, not years. A new company can focus on satellite and ground segment software and operations without having an extensive RF, hardware, and mechanical engineering department. Have a satellite concept? Here are a few of the companies that can turn that concept into reality:
ACC–Clyde: a one-stop-shop for small satellite development and integration combined with full mission lifecycle support
Blue Canyon Technologies: Small satellite components and integration
Nanoavioics: Turnkey source for Satellite Buses, Payload Integration, Launch Provision, Mission Operations
UTIAS Space Flight Laboratory: a University of Toronto offshoot, this cost-effective company has a 20-year history of integrating and supporting small satellite launches.
To get a feel for the cost of a viable small satellite mission, I spent some time with Nanoavioncs and SpaceRyde. In about two hours, I created a draft mission plan to collect LoRA IoT signals from earth-based sensors which would be stored and forwarded to a single ground station collection site. The estimated cost of the satellite ran $250K, with a launch cost of $250K from SpacRyde. So for about $500k, you could set up a space-based IoT business. Ongoing operations and ground station services costs would still need to be worked out, but you could crowdfund this mission at that cost. That is incredible!
It’s Still A Business: No Bucks-No Buck Rogers!
I want to close with a primary theme underlying all aspects of the conference: It’s a business. You need a full-lifecycle business plan along with a well-defined identified market with paying customers, be it remote sensing (e.g., SAR radar satellite images), space-based IoT, or a massive worldwide communications service like SpaceX StarLink. Venture and SPAC-based financing can only go so far, and success requires self-sustaining profitability.
Profitability has notoriously eluded the satellite industry. However, with the dramatic reduction in launch and satellite costs, this generation of investments may finally create a significant number of profitable satellite businesses. That is the bet that everyone attending the SmallSat Symposium is making.