Building Infrastructure In The Sky With Impact

Long before people were talking about "doing well by doing good", serial "humanitarian entrepreneur" Mikkel Vestergaard Frantzen was doing it. His new company, Sceye, aims to take this business philosophy to an entirely new level: namely, the stratosphere. Repeating his earlier successes will not be easy.

Nearly three decades ago, when he was in his early 20s, the Dane transformed a family business making uniforms and blankets into a mission driven company tackling big challengers in public health. Many profitable successes followed. LifeStraw, a handheld water filter, among other things has helped nearly eradicate the scourge of guinea worm, in partnership with the Carter Center.

The firm has also sold more than a billion bed nets that use a chemical coating to kill mosquitoes on contact. These have played a big part in reducing the number of deaths from malaria, from around 1.5m a year (mostly children) to close to 600,000 now.

At first, trying to harness the profit motive to tackle public health challenges was controversial. He ran into fierce opposition from some in the NGO world, such as Doctors Without Borders, who preferred government and charitable funding of non-profits to doing business with organizations looking to make money. Today, he claims, trying simultaneously to do well while doing good is "no longer controversial". Well, maybe.

The considerable positive impact Vestergard Frantzen has had with his public health and other innovations could be dwarfed by the impact he hopes to achieve through his latest company, Sceye , which I discussed with him this week at the Sorenson Impact Summit. We spoke immediately after he had completed a successful test flight in New Mexico of one of his flying gas-filled vehicles (which he doesn't like to call air ships, perhaps because that recalls an era of transportation that ended disastrously in the 1930s).

Vestergaard Frantzen's vision is to create an entirely new layer of digital infrastructure in the stratosphere, by launching a high-flying fleet of thousands, powered by a combination of solar energy and onboard batteries. Sophisticated cameras and other equipment would allow far better monitoring of activities on the ground, from methane leakages to storm damage and population movements, as well potentially delivering cell phone connectivity and the internet to remote and isolated populations.

He argues that Sceye's aircraft will have significant advantages in some tasks over both drones, which can't stay airborne for long, and satellites, much higher up than the stratosphere's 65,000 feet, and thus not able to see what is going on below with as much precision, and not able to hold their position fixed for long periods of time. Sceye will be able to put aircraft in a fixed position in the sky, allowing long periods of observation of the same site, in contrast to the brief fly-by snapshots of satellites. (Don't worry, he says; they will be flying high enough not to ruin the view by filling the sky.)

This is a bold vision, though not an original one, Vestergaard Frantzen freely admits. Back in the 1990s, the US government unsuccessfully spent around $12 billion trying to do the same thing.

Can a boot-strapping entrepreneur really succeed where Uncle Sam and the well-funded American military industrial complex failed?

Vestergaard Frantzen says that, compared to the top-down big government system, there are significant advantages to his approach to innovation. This is based on starting small with a tiny aircraft at low altitudes, conducting lots of experiments, learning and incrementally improving. The government's failed attempt involved contracts with big companies (the usual defence/aerospace suspects) that, he argues, incentivized them to move too quickly to prototypes rather than taking their time to acquire the practical knowledge to succeed in a part of the atmosphere that is still not well understood.

So Sceye has been evolving deliberately, constantly tweaking and try out new approaches, so that there is continuous learning and improvement. Having spent a few years iterating to a full-sized craft able to reach and stay in the stratosphere, the focus for the past year has been on learning how to navigate and hold a fixed position. Next the goal will be to see how long a flight can last, and what parts fail first. Perhaps as soon as 2025, the first revenue may be generated, and the focus would then begin shift to how fast the firm can scale up from a few test craft to a large fleet.

So far, some of the biggest practical challenges have been developing enough battery capacity to power the craft through the night when solar power is unavailable, whilst keeping the weight light enough to fly. Here Vestergaard Frantzen's expertise in materials science has helped - a common factor in all of his successful products. Innovations in materials has helped: Sceye's craft have hulls built using lightweight but super-strong graphene - a material that was not invented when the US government blew through that $12 billion.

His previous successes have allowed Vestergaard Frantzen to spend $80m of his own money, so far, to get the project off the ground. "I didn't want to accept outside investment until I was certain we would succeed," he tells me. Once he became convinced that it was a "matter of when not if", he took two tranches of capital (adding up to around $25m) from Mexican telecoms tycoon Carlos Slim. (Sceye might provide connectivity to people in remote parts of Latin America far more cheaply than building a network of cell phone towers.)

I have known Vestergaard Frantzen for more than a decade, since we met on the fringes of a conference in Nigeria (which is where he started his first company as a teenager), and it has been great following this idea turning from a wild vision I didn't really get when I first heard about it a few years ago, to something that now seems to have a real chance of success.

There is still a way to go, though, with significant obstacles ahead. More money will be needed to take Sceye to scale. And as questions from the audience at the Sorenson Impact Summit highlighted, as the prospect of this new layer of infrastructure being turned on comes closer, there will be policy questions to be addressed.

Currently, the regulation of the stratosphere is quite light, Vestergaard Frantzen says. Though lower levels of altitude are not, and I can imagine regulators taking a greater interest once they have something potentially to regulate. And what if all this new monitoring and communications infrastructure were to be used for bad purposes, not good? Vestergaard Frantzen insists the company will only provide its capacity as a service, meaning it can control who gets to use it, and cut them off if they misuse it. Protecting it from misuse will also be built into the company's governance. Whether this will be protection enough remains to be seen.

There is also the risk that, as he shows that there is an untapped fortune floating in the stratosphere, rivals will emerge to challenge Sceye, perhaps with deeper pockets. Possibilities range from Elon Musk to the Chinese military. Of course, no businessperson likes competition, but its emergence would be a sort of triumph in itself: as they say, imitation is the sincerest form of flattery.

What do you think?