Reinventing Space Industry

Like computer technology in the 80’s or the internet in the 90’s, space is becoming a consumer driven and high-volume industry. With his unique background and experience, Bulent Altan is one of the best people who can share with us the story in which she played a pivotal role and can also help us envision the future.?

• Did you see this “NewSpace” coming when you graduated from Stanford in 2001? Was it a conscious decision to work with the “disruptors of space industry”?

Having graduated from TU Munich in 1996 and completed my follow-up studies at Stanford in aerospace engineering in 2001; I was faced with a decision. All my options in Europe or USA were very reputable companies one would dream to work at but indistinguishable from their way of working. Driven by government decisions and a very risk-averse governance, these companies were all driven by technologies that came years ago, where business models were not focused on innovation or affordability at all. Days full of meetings without decisions, long projects with end results that do not really differ in their technology from the technologies of the 1960s that landed us on the moon. I wasn't exactly thrilled.

But my solution came pretty much from the sky. We were three close friends at Stanford who built some of the first small satellites, so-called CubeSats. We were, as they say, completely hands-on. Exactly at that time, a not so well-known, at least once in our industry, new millionaire, Elon Musk, came to Stanford and told how he planned to start a Mars mission after a failed attempt, because he himself could not buy rockets, opened a space company and wanted to turn the industry upside down. He spoke of innovation in consumer electronics, in software, of agile methods to lead projects and above all of quick decisions and a willingness to take risks, all financed with private money first. ?Gone was the discontinuation of "Failure is not an option", "First time right", which led our industry to paralysis. It was "fail fast", "reiterate", "take risks". ?I decided very quickly for this company.

• Looking at this decision today; it looks like a great choice, and you had already bought the innovative idea. But it was a bold decision at that time. What type of reactions did you get?

When my professors at Stanford heard about it, they quickly came to me. Their statements were, "There are no real commercial use cases for space travel", "Such a project cannot be realized without government supervision and understanding", "His money will run out and in a few years this guy will leave this topic without money and interest."

That could all have been true. In my long work at SpaceX, first as an engineer but then also as the head of one of SpaceX's three technical departments, I was also able to witness how, for example, we almost went bankrupt ?in 2008 ?after three false launches ?and ?how we had to fight for a long time in 2011 and 2012 in order to get permission to dock a capsule that has not been developed under a very strict agency leadership to the international space station. It was not only about endangering the most expensive project of mankind but also about the lives of 6 astronauts.

In the end, however, it was a success story and together we built a company that was responsible for several very important events.

• Did you have a similar mission of “innovation and disruption” when you took the role of CEO of Mynaric which is a listed German space company?

You’re right. The “commercialization, innovation” mindset is what I was looking for and what NewSpace needed. At Mynaric, we build laser communication terminals that can connect satellites and aircraft with each other at the highest bandwidth. If the traditional companies ?built them for research purposes and delivered them in very low numbers, these terminals had a price between 15 and 20 million euros. Today, Mynaric has a production facility at Oberpfaffenhofen Airport, which can build 2000 such terminals a year. Commercial applications need innovation, customer proximity, attractive prices and a business plan. For us, this is NewSpace.

• ?Do you think that the “New Era” in Space Industry will have impacts in other businesses and industries?

Such industry reversals do not occur frequently, but they happen from time to time, and their effects are felt far beyond the scope of the industry and take all other industries with them. The biggest example of this is the turnaround in the electronics and communications industry. We are all surrounded by computers today and they are all networked. But the beginning of this story is not exactly commercial. What we now think of as Silicon Valley was born out of research into missile guidance systems for military and similar other defense purposes. The same was true of networking.

Today, these use cases are even quite larger. Not a single defense system is without any electronics, but what has happened over the years is that commercial ?use has far outstripped military and government-driven use. ?Where ?every ?soldier today has a complicated communication system at their disposal, the civilian population is all the better equipped with supercomputers in every pocket that automatically adapt to each country's radio systems, have memory for thousands of high-definition videos and images, and more.

The civil market today is more than a hundred times the value of the old market and dominates the industry. Today, more development money is spent and more invested and more value is generated to share cat videos faster than it leads into missile defense.

This is exactly the step that the space industry is now taking. What ?began with the Cold War, the?competition ?to be ?the first nation on ?the ?moon, to keep each other under surveillance with remote sensing satellites, today goes in the direction of ?connecting private people, navigating and steering cars, ships, airplanes, enabling power plants and other industrial facilities, investors a ?glimpse into the industrial location and much more.

• What can we expect from space travel in the coming years?

First of all,?when talking about space travel, what most people think of is manned flight, astronauts, moon landing, the space shuttle, etc.??We are enthusiastic about such images and what emotions it awakens in us. And I can say that these emotions were also my motivation to go into space travel and these advances are emotional for everyone. But the actual space industry is farmore commercial and close to Earth. ?Today, when we as Alpine Space Ventures talk about an investment ready NewSpace industry, we are talking about exactly these near-Earth applications. For us, the space industry first and foremost has two major value chains. Such a chain is “Connection” and “Generation of Earth observation data”

• Some much for my dreams of space travel ?. Apparently, exploring and building “Near-Earth” Business will be our primary focus in the short term. Which businesses will be benefiting from this focus the most?

Today we still speak of a digital divide. With 4 billion people in the world today without broadband access, lack of connection in the air, on the water and between population centers; we see how important “a worldwide communication solution” is. Building requires constellations. A constellation is a large number of satellites that are small and light and can be delivered into space in 40/50/60 pieces at once .

This “constellation” value chain starts with satellite transport, i.e. rockets, such as Isar Aerospace, then innovative?and fast satellite builders, companies that build the components for ?these satellites, which also ensures that with its propulsion systems, satellites return to the atmosphere after their expiry time. ?This chain also needs service providers on the ground such as ground stations and world junk monitoring as well as end-user equipment manufacturers.

The second such value chain is the generation of Earth observation data. This?chain, in addition ?to the same elements as the connectivity chain, also has the elements of analysis companies that process the ?basic data in ?the form of visual ?and hyperspectral data, ?into?human-comprehensible answers and data platforms, such analysis companies, to customers. and data generators. Such Earth observation companies will be the cornerstone in several industries from autonomous driving, to agriculture, to logistics to our very important topic of climate change.

• Now I would like to shift to your other role as “Investment Partner of Alpine Space Ventures” with a mission of supporting breakthrough technologies& disruptive business models, to deliver outsized returns to investors. What are the motives – besides the obvious ones you stated earlier- for investing in a start-up?

Exponentially growing consumer needs create a huge market and relevant opportunities. Start-ups in this industry offer accelerated development and faster procurement cycles which means that startups can become real businesses in <10 years therefore ideal for VC investment

The investors will be highly defensible because companies become world-leaders in relevant technology, improving constantly and making it increasingly difficult for new entrants to catch up.