To Boldly Go, or Proceed with Caution? Balancing risk and opportunity is key to success in the New Space Economy

This is the 4th in a series of discussion on the New Space Economy I am coauthoring with Brian Miske . You can find the other articles here:

1) The Universe is under no obligation to make sense to you, but in business profitability is non-negotiable.

2) History Doesn't Repeat Itself, It Rhymes: Why Every Company Will Eventually Need to Leverage Space

3) Accelerating Space through Experimentation with Intent

In the pursuit of leveraging the opportunities presented by the burgeoning commercial space economy, it is crucial to recognize the value of embracing unconventional approaches towards innovation and growth. The new-economy dot-com bubble of the 1990s serves as a cautionary tale about the pitfalls of adhering to conventional wisdom and prioritizing superficial metrics over profitability. Despite being the biggest bubble since the Wall Street crash of 1929, its legacy continues to influence how we view technology today. To unlock the true potential of space and achieve sustainable growth, organizations must challenge their assumptions about the past and learn from the lessons of these historical bubbles.

“Only those who dare to challenge the consensus and seek the truth beyond the veil of popular opinion, can break free from the shackles of conventional thinking and pave the way for true innovation.”

As we look to the future, it's clear we are entering a new Age of Exploration, this time not to a finite ocean that loops back on itself, but to an infinite frontier in space. As it was then, it is now, while military or defense concerns motivated much of the technology that enabled the exploration, economic and civil opportunities dominated and helped create our world today. Unfortunately, but if history teaches us anything, not surprisingly, many organizations are failing to position themselves to take advantage of the opportunities that this new frontier will provide as the market first grows exponentially and then diversifies in maturity. Just as organizations missed out on the potential of the internet and microcomputers in the past, there is a risk that organizations will miss the boat on space if they don't act now. The key is, to not use the same playbook as in the past.

The potential of the space market is enormous. The space economy is a vertical and multi-sector entity that horizontally spans existing and emerging value chains. It includes everything from satellite manufacturing and launch services to earth observation and space tourism. According to a report by Morgan Stanley, Bank of America and others, the global space industry could generate revenue in estimates between $1.1 to $4.0 trillion by 2040, up from $350 billion in 2020.

Which begs the question: if the potential is so great, why are so many organizations failing to position themselves to take advantage of the opportunities that the space market presents. One of the key reasons for this is a lack of understanding of the space market and its potential. Many organizations see space as a niche market, government only, or as something that is too far away or too expensive to be relevant to their business. However, this is a short-sighted view. Space has already transformed a wide range of industries, from telecommunications to transportation, from agriculture to energy and is poised to do that again and more.

To position themselves for success in the space market, organizations need to start by understanding the key trends and drivers that are shaping the industry. These include:

??????? The growing demand for satellite communications and remote sensing: Satellites are playing an increasingly important role in our lives, from providing navigation services to enabling global communications. The demand for satellite-based services is expected to grow rapidly in the coming years, driven by the need for faster and more reliable connectivity, as well as the growing demand for remote sensing data.

??????? The emergence of new space startups: The space industry is no longer the exclusive domain of governments and large aerospace organizations. A growing number of startups are entering the market, with innovative new business models and technologies that are disrupting traditional ways of doing things.

??????? Freshly renewed interest and urgency in space exploration: Governments and private organizations around the world are investing heavily in space exploration, with the goal of establishing a permanent human presence on the moon and, eventually, on Mars. This is driving demand for new technologies and services that can support these missions.

??????? Space resources as a necessity rather than a nice to have: As the economy shifts inevitably from being based on fossil fuels to be based on special metals governments around the world compete for control of these strategic resources. The same hegemonic games that were played for control of oil fields post WWII are now being played for control of Cobalt, Nickel, and Platinum. Already the human toll of our insatiable appetite for special metals is on the order of anything done for oil. In our solar system alone are enough resources to completely disrupt and upend the special metals markets. This removal of scarcity may frighten commodities traders but would be a boon for humanity.

To position themselves for success in the space market, organizations need to start by identifying the opportunities that are most relevant to their business, leveraging frameworks that can help uncover those opportunities and expose risks that are hidden by a terrestrial mindset. This will depend on a range of factors, including the company's existing capabilities, its strategic goals, and the competitive landscape.

One area where there is significant potential for organizations to capture upside in the space market is in satellite communications and remote sensing. Clearly, organizations that can develop innovative new satellite technologies or services that can provide faster, more reliable, and more cost-effective communications or remote sensing data will be well-positioned to capture a share of the growing demand for these services. However, the true disruptors will be those that innovate in applications of satellite data to terrestrial needs, likely leveraging multiple data sources and signatures, finding unexpected patterns.

Another area of opportunity is in space transportation. While launch has seemed near saturation as recently as 2022, continuing challenges for recent entrants has left a gap in services with current capabilities. Additionally, the growing interest and ambition in space exploration and the development of new space habitats, is driving demand for new transportation technologies that can safely and cost-effectively transport people and cargo to and from space. Organizations that can develop these technologies or even participate in this value chain, will be well-positioned to capture a share of the growing demand for space transportation services.

In addition to identifying the right opportunities, organizations also need to invest in the right capabilities to succeed in the space market. This may require developing new skills and expertise, such as in space systems engineering, propulsion, or robotics. Most likely, given the general lack of space experience and expertise, it will require partnering with other organizations and startups to access new technologies, capabilities, or markets to realize the full commerciality of space.

New space companies such as SpaceX are on the forefront of this positioning Founded in 2002 by Elon Musk, SpaceX has developed innovative new technologies and business models that have disrupted the traditional competitors. Another, similar, example is Blue Origin, founded by Jeff Bezos in 2000. Blue Origin is developing reusable rocket technology that can significantly reduce the cost of access to space. The company is also working on developing a lunar lander that can support NASA's plans for a sustainable human presence on the moon as well as an International Space Station replacement.

An example of a non-launch company is OneWeb, a satellite communications company that is working to provide affordable, high-speed internet access to underserved communities around the world. OneWeb is building a constellation of low Earth orbit satellites that will provide global coverage and enable a range of new services, from in-flight connectivity to remote education and healthcare.

Looking beyond the LEO economy, Axiom Space was established in 2016 to look beyond the International Space Station. Axiom currently operates missions to the International Space Station (ISS) for customers, including space agencies, companies, and individuals with the ambition of leveraging existing efforts to be the natural successor.

Companies from other sectors that are positioning or directly leveraging space are equally if not more instructive to consider. John Deere has, for several years, been engaged with NASA to develop robotic construction vehicles that could be used on the Moon. Also, many companies in the agricultural and energy industries are rapidly engaging Earth observation derived insight as a service or developing in house capabilities in partnership with Earth observation data providers. Other industries such as luxury goods and tourism are both leveraging space and chasing the emerging space consumers markets.

These examples demonstrate that there are many opportunities in the space market for organizations that can identify the right opportunities and invest in the right capabilities. By understanding the trends and drivers that are shaping the industry, and by developing innovative new technologies and business models, organizations can position themselves to capture the upside in the future of space.