Investing in startups that are out of this world
Since the launch of Sputnik in 1957, Space has been the exclusive province of national governments and massive contractors. Because each new mission involved exploration and setting global firsts, space was too expensive and too risky for smaller entrants. Instead, the industry’s first 50 years were driven by major players like NASA and other government agencies whose incredibly risk-adverse approach to innovation relied on massive amounts of process and redundancy. Since then, space has largely been closed for entrepreneurial pursuits, as product iteration cycles have measured on the scale of five to 10 years and budgets have measured in the billions.
By contrast, the high tech and software industries have progressed at tremendous speeds. Thanks to reduced costs and standardization of developer platforms like Amazon Web Services and Docker, today’s technology founders can launch a website or app with less than a million dollars. These burgeoning entrepreneurs are constantly improving their products by embodying “lean startup” practices, where the product is iterated in cycles as short as two weeks.
Now, high tech’s paradigm of agility is making its way into the space sector, and Bessemer is seeing unique potential in the convergence of the world’s best technology entrepreneurship and space. With Moore’s law and the dramatic cost reductions in space components—sometimes between 10x and 100x cheaper—entrepreneurs are taking a startup approach to building space companies. In fact, the majority of space companies I’ve met are applying a software development mindset to their efforts, using industry-specific terms like “build” to refer to each version of their satellites, and even treating failed satellites in their constellations the same way Amazon or Google treats a failed server: when we have so many, we can afford to lose one.
We see powerful potential in applying the mindset and tools of the tech industry to space entrepreneurship, which is why we’re announcing Bessemer’s new Spacetech roadmap. This will allow us to capitalize on promising startups, like Rocket Lab, our latest spacetech investment that is opening space for business with weekly launches to low-Earth orbit. Even Skybox Imaging, one of our portfolio companies, which was acquired by Google last year for $500 million, would have benefitted from the frequent low-cost launch opportunities created by Rocket Lab’s Electron rocket. We expect this company, and others like it, will pave the way to orbit for hundreds of companies to come.
We look forward to meeting the next generation of promising spacetech startups that are out of this world.