From Idea to Impact: The Journey of a Space Technology Startup
Television declared space the final frontier nearly 60 years ago. In that time, we have embraced many other frontiers of human knowledge – the deep sea, the quantum, the neurological – but none exerts quite the same hold on the human imagination as the starry skies beyond Earth’s atmosphere.
This fascination is more than merely anecdotal, with the world as a whole putting its money where its mouth is. According to recent figures from Benchmark International, “In 2021, the global space market was valued at $388.50 billion and is expected to reach $540.75 billion by 2026. The sector has expanded by an impressive 70 percent between 2010 and 2020.”
Knowing that enthusiasm exists and money is available is not, however, the same as building and launching a successful startup. But while space technology companies must rely on the same combination of brainy ideas and good old-fashioned luck as most, getting to space the startup way does have some unique characteristics.
Step-By-Step: Getting to Space the Startup Way
A successful startup has a few basic ingredients: a good idea, the means to see it to fruition, and people who believe in its value. And money, of course. Happily, the barrier to entry in space is steadily diminishing for entrepreneurs.
“The space economy is expected to grow at a compound annual growth rate (CAGR) of 6.84% between 2022 and 2026,” Benchmark adds. “Analysts also predict that the space industry will reach $1 trillion in annual revenue by the year 2040, with launch costs lowered by 95 percent.”
Such trends provide amazing opportunities for space startups to air ideas for which previous decades might not have made room. The anxieties that made NASA pull back from Mars missions in the 70s and 80s have officially dried up, replaced with an open-armed embrace of new technologies and applications.
For those who want to make hay while the sun shines, what will the journey look like?
1. Create a Business Model
“Our view of the world is that there are two ways to make money in space,” said Simon Halpern, CEO of plasma propulsion innovator Phase Four, in an interview with Fast Company.
Halpern explains that you can either generate income with technology (e.g. a sensor) that solves a problem, or by putting that technology in the right place at the right time (e.g. positioning the sensor to observe an event).
We can apply this same general principle to most space innovations. Successful startups will either create a piece of technology that fills a niche, or they will design a way to get technology to space more efficiently. Both angles have value in today’s modern race to the moon, Mars, and beyond.
2. Leverage the Right Resources
In rare cases, the person with the ideas also has the money to see it through … think Elon Musk. However, even Elon buddies up with government agencies all over the world in his attempts to make a human presence in space real.
Understanding where the resources lie is key for any space technology company. A startup needs all kinds of different tools that most cannot provide themselves, from cargo space to launch sites.
In recent decades, organizations like NASA and ESA have made concerted efforts to partner with private enterprises to support space technology startups. Other organizations, such as The Mars Society, offer information and support to help startups on their way.
3. Find the Funding and Talent
Of course, sometimes a startup simply needs funding for materials and talent acquisition. After all, any nascent company needs money and smarts to get off the ground – figuratively and literally.
Many organizations exist to help with this. For instance, America’s Seed Fund is provided by the National Science Foundation, offers up to $2 million, and never takes a cut of the equity. Accelerators such as Starburst similarly provide backing to startups around the globe.
4. Combine Old Tech with New
Much of what we’ll create this century is modeled off last century’s innovations. EVA suits and rocket launches are both based on the same technologies we used to get to the moon, for example. Yet they need constant updating, which is why NASA recently selected Collins Aerospace, which provided EVA suits for Artemis and ISS missions, to design the next generation.
Even while we trust old technologies, we integrate them with new ones. That’s why, according to statistics, “Today’s launch costs of $1,500 per kilogram ($1,500/kg) are about 30x less than the launch cost of NASA’s Space Shuttle in 1981.”
It’s not necessary to have a completely new idea to be successful in space. Knowing when to innovate and when to leverage existing technologies is critical. The best startups seek a problem quickly and elegantly, and only reinvent the wheel when necessary.
Common Challenges for Space Startup Companies
Despite the above pathway to success, space startups do inevitably face a number of challenges. These include:
- The side gig mindset: Many startups can’t afford to go full-time. The people and companies who are successful have a side gig mindset, willing to work on their idea in between jobs and family.
- High failure rates: According to the most recently available data from NASA, “41.3% of all small satellites launched failed or partially failed.” This is the nature of entrepreneurship in space.
- Limited guard rails: Space organization often lacks the structure that we take for granted with entrepreneurship on the ground. Transportation, storage, maintenance … inventors must factor these into their designs and planning rather than count on them from external sources.
That said, these challenges often prove even more exciting for those who truly have the final frontier mentality.
Explore Opportunities and Break the Mold
If you’re an entrepreneur or investor who wants to explore opportunities in the space technology industry, don’t sit on that idea. Instead, we invite you to register and submit a solution to the 2023 NASA Entrepreneurs Challenge. If your new technology can assist in the areas of moon exploration or climate science, we want to hear it today!
