Humans have always looked up in wonderment at space.
In recent years, as technology has improved, ideas about the colonization of Mars have been thrown around. They all seem very far-fetched and much too far in the future for us to picture now. But the space industry has advanced to a critical inflection point. Many companies are leading a new age in the space economy. These companies are not fighting to simply get to Mars first, they are fighting over the viable economy that is being created in space. So what do those companies look like? What problems are they solving? How will they alter the future?
Space exploration started in 1958 when, in response to the growing race to reach orbit, the United States founded NASA. Within 5 years, they had built their first mission rocket, and by 1969, the first American man stepped foot on the moon. As Neil Armstrong took his first steps, he declared: “One small step for man, one giant leap for mankind.” It was indeed a huge step for mankind, introducing a whole new frontier: the exploration of our solar system.
However, as history shows, exploration has always preceded monetization. Governments were, therefore, initially focused on exploration, but by the 1980’s, commercialization began with satellite technology and the introduction of dish TV. Communications companies would contract NASA to provide launching services; however, significant time and money to produce the launch.
Major corporations faced incredible setbacks like high costs, limited launch opportunities due to crowded launch schedules, and competition for resources. In a free capitalist society, this formula would never work. In the 90’s, NASA faced hurdle after hurdle, with unsuccessful missions costing astronaut lives and costly rockets underperforming, causing NASA’s missions to be suspended and investigated. NASA was building rockets under heavy government regulation with taxpayer money; the industry was begging for a spark of creativity, frugality and risk. What better vehicle to offer this than a private company with a visionary entrepreneur?
By the early 2000’s private companies finally answered. In 2000 Jeff Bezos ushered a new era of space by founding Blue Origin, whose goal was to pursue space travel and private operation in space. Shortly after Bezos, Elon Musk founded SpaceX in 2002, which intended to solve the cost issue of space travel and increase launch frequency while introducing the idea of reusability. This new idea of reusability and cost reduction would transcend the space industry. The idea that the most expensive part of the rocket, the booster, could be successfully reused was revolutionary. This encouraged new players to join. In 2006, Peter Beck founded RocketLab, a company determined to build lightweight, cost-effective satellite launching rockets to meet the growing demand for satellites. By combining new radical thought and denouncing certain previously held notions of rocketry and physics these founders led the way in revolutionizing the space industry.
Through observing these advancements, NASA realized the benefits of partnership with private corporations over government organizations. Over the last 20 years, since NASA has offloaded many missions to private firms, they have presumably saved close to 20 – 30 billion in tax-payer dollars.
In this Image, courtesy of SpaceX, the rocket booster landing and reusability can be visualized.
But how will these companies monetize their operations? Well, to begin, the companies that operate as launch services operate a fully integrated system that provides governments and private corporations with advanced launch systems at a fraction of the original price. For example: Rocket Lab, the New Zealand-based company has created what is now regarded as the cheapest rocket on the market. In a recent filing, Rocket Lab revealed that it had just signed a multi-launch deal with a satellite operator and manufacturer until 2026, valued at 50 million per launch. The company also revealed that with their new incredibly lightweight rocket Neutron they could oversee approximately 5.6 Billion dollars of value in launches until the year 2030. Impressive numbers for a company with a market cap of 10 Billion dollars (Most Recent Data). The company has an impressive ability to launch at a rapid pace and has developed an extremely cost-efficient rocket. In the following graph, we can see the inflection of Falcon 9 (Space X) and Electron (RocketLab) and their evident efficiency. Both SpaceX and RocketLab have plans to utilize their newest, larger, and more powerful rockets; Neutron (RocketLab) and Starship (SpaceX).
This graph shows us the number of launches executed by Electron (Rocket Lab) and Falcon 9 (SpaceX) compared to other rockets
The space economy is trying to solve the issue of access to communication worldwide. Currently, the US government under the Biden and Harris administration has set aside a budget of 65 Billion Dollars to provide Americans with connectivity everywhere. Not one penny of that budget has been spent. Connectivity, both internet broadband and cellular broadband, are still technologies our world has yet to discover fully. With immense funds and corporations like AST Spacemobile, Starlink and Amazon Kuiper, corporations are prepared to bring the next generation of connectivity and leverage space to further the communication experience on Earth. Here in Montreal, we live in privileged areas with extremely strong connectivity. There are many rural areas, developing countries, and even parts of Quebec only a few hours from Montreal where connectivity is still lacking. Many homes, devices, and phones are still missing the connection that others have to the world. If we believe in equity, we should believe in equity in communication. Already, Starlink, run by Elon Musk, has produced a successful product that provides internet to millions of people remotely worldwide and is set to bring in revenues of 6 billion dollars for the fiscal year 2024. In addition, AST Spacemobile is developing a fleet of satellites to provide cellular connectivity to the world, removing dead zones of LTE and 5G. Both these companies are examples of how the space economy will bridge the gap between the connected and unconnected.
AST SpaceMobile is attempting to create a fleet of D2D (Direct to Device) Satellites that will provide cellular broadband to all parts of the world, without dead zones or interference.
In the space economy, we also find people like Cam Geferien, the founder of Intuitive Machines, a company pursuing lunar launch missions and partnering with other space companies to build the future of the ISS (International Space Station). Over the last few years, the ISS has aged quite a bit and has reported issues like leaks. Replacing such extensive infrastructure would now be done by private corporations. Intuitive Machines, in partnership with Axiom Space and Sierra Space, are important players in developing the infrastructure required to build the next parts of the ISS.
Another less explored aspect of the space economy is Space mining. As Neil De Grass Tyson once said, “The first trillionaire will be the person who exploits space resources on asteroids and comets.” The average asteroid can have up to 50 billion dollars of Platinum that can be mined. Platinum is an important commodity used in electronics production for sensors, connectors, and much more. The space mining industry is still in its earlier stages, but companies like TransAstra, AMC Mining and Astro Forge are early leaders in the future of mineral harvesting in space.
This brings us to today, where we face a pivotal point in our history. We have advanced further in engineering and computing, allowing us to dream even bigger. Today many of these companies are growing at a rapid rate. The number of space industry startups over the last decade has seen a significant increase. These companies are not there to simply explore space or provide tourism for billionaires; they are the new horizon of possibility in telecommunications, aerial imaging, warfare, medical research, agriculture, energy, safety, mining, and much more.
*Disclaimer: Anything said in this article is not financial advice. Do your due diligence.*
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