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  • Writer's pictureYannick Oswald

Great Thinkers: 'The Future of Space'

Updated: Feb 2, 2022

Hi everyone! Today is a special post for me...

This is the first edition of a new format we call the 'Great Thinkers' series. Consider it an extension of my regular blog posts, which focus on venture market trends and early-stage startup funding.

'Great Thinkers' is about taking deep dives on specific tech topics with friends and experts. At the end of each post, I highlight my key takeaways from the discussion.

My regular blog posts will have addressed many of these topics. But not all. For some of them, readers have reached out with questions. But, sometimes, I just want to share the knowledge and thoughts of these incredible humans with the broader community. I might turn this into an audio format in the future, let's see. I hope you enjoy the first episode!

I find Space fascinating and, for me, 2021 ended with quite a bang with the launch of the James Webb Space Telescope. Something of this scale and ambition really gets everyone dreaming about the potential opportunities beyond our planet. But I also see a disconnect between these large-scale, publicly-funded exploration missions and the commercial projects that are generating and processing large amounts of data through mostly smaller satellite constellations. What's really happening is that these NewSpace operators are quickly building the next tech infrastructure. This Spatial infrastructure is becoming increasingly complementary, but also competitive, with our terrestrial tech infrastructure. Think about how telcos, cars, farms, etc...

So, I caught up with Bogdan Gogulan, Founder of NewSpace Capital, to discuss the current commercial Space tech landscape, and what innovations are driving it forward.

Can you explain a bit about how the Space tech landscape currently looks?

Space is currently a $300 billion industry. This is about seven times bigger than artificial intelligence and robotics combined... And, by mid-century, it should reach $2.3 trillion. This growth is really what’s interesting to people right now, and it’s important to note that this growth isn’t just a business cycle. It’s a technological and structural change to the economy. And what’s driving this is really the demand from traditional industries.

There’s a lot of excitement around these big launches - such as the James Webb Telescope - but I want to emphasise that these sorts of projects make up less than 25% of the $300 billion I talked about. Even though there is record-breaking funding for NASA and the Department of Defence by the US government, 75% of the total value is from commercial investment.

I’ve heard a lot of people talking about ‘New Space’ and ‘Old Space’ with government-funded projects and some big communication players such as SES etc. - is this how you’d differentiate them - commercial vs non-commercial?

Yes. In the past, Old Space was considered any Space exploration that was defense based, vs. New Space that was really any startups involved in Space (e.g., Space X). Now, Old Space mostly refers to government or science-based missions, and New Space is considered anything related to commercial Space exploration.

We hear a lot about deep Space exploration: telescopes, deep Space probes, the Moon and Mars missions etc., but less than 1% that happens deep in Space has an impact on economics. We focus on Earth and Earth’s orbit. That’s it. Because 99.9% of the commercial activities happen here.

That’s very interesting. Could you please tell us more about the various frontiers: Earth and Orbit, asteroids, and, of course, the moon and Mars!

Ah! You have to remember that the further away things are in Space, the more time is needed to take advantage of it. So, from a commercial perspective, deep space is not that interesting.

The moon isn’t interesting because there are no resources worth exploiting there, and the conditions are too harsh: there is high radiation, extreme temperature, and the regolith (moon soil) is very damaging to any machinery that is used there. The moon is really used to test some technologies. What makes the moon so interesting is that it can be leveraged as a launchpad to explore further. It’s much easier to launch from the moon as there is zero gravity. So it is a natural stopover to go to Mars, for example.

Asteroids are also talked about for their potential, but there are four types of asteroids. Some are just made of lumps of dirt, snow ice, etc and there are also some metal asteroids that are largely made of iron ore - these aren’t that interesting economically. However, there are some that are made up of platinum, gold, silver, and other rare-earth metals. These are more interesting, but depending on their trajectory can be difficult to access. The majority of these asteroids are found in the asteroid belt (between Mars and Jupiter) so will take too long to access.

And Mars. Again, there’s absolutely nothing to do there, but there are two reasons why some see it as interesting. One, it’s a good stepping stone for deep space exploration. And two, Mars used to be very similar to the Earth in terms of its surface and climate. So there are some theories about doing all sorts of crazy stuff to try and create an atmosphere. But, I leave that to Elon...

So what’s driving commercial growth and investment in Space?

Commercial Space opportunities are really being driven by communications, navigation, Space observation and data, and the demand from traditional industries: agriculture, shipping, energy, mining, consumer electronics, etc. They’re the buyers of this industry - either communication or data generated in Space. In terms of the analytics, that market is very fragmented and that's probably the most interesting market to play in.

There’s also a lot of activity that happens in the background. For example, a lot of money has been invested in launch, despite it only making up 2% of the market. That’s because, until recently, access to Space was very difficult and expensive. Since investment in this area though, the cost of launch has been reduced by 95%.

Space is essentially where the internet was 20 years ago. We’re building the infrastructure to actually be able to exploit space commercially.

You’ve mentioned in the past that Space is becoming the backbone of the digital transformation of our economy and society. What do you mean by that?

Well, let’s look at 5G, as an example. As it’s being rolled out, people expect to get the same level of service in the middle of the countryside as they would in densely populated areas. But that’s not the case, because it’s short-range. And expectations for the same level of service whether in the city or the countryside will only increase once people move to driverless cars - what are they going to do during the journey when they’re not driving?

That’s where using lower orbit satellite constellations come in. Antennae can easily be added to cars and, right now, AST Space Mobile is developing a chip that can be used in a normal phone so that it can use satellite and communication outside of densely populated areas.

Ok, the internet is one area where we can clearly see Space tech having an impact. But what are some other key use cases? 

The Internet isn’t an application, it’s an infrastructure. It’s when you start looking at everything you can get on the internet that things become interesting.

So, for Space tech, one of the largest low Earth orbit constellations is being launched by a Chinese car manufacturer. One reason for this is because they need more precise navigation for autonomous cars. Using existing satellite navigation systems (e.g. GPS, Baidu, GLONASS) can reduce the margin of error down to 15cm. But having this distance on either side of the vehicle is too big. 30cm is pretty accurate for a nuclear missile, but for cars, it’s the difference between you hitting someone or not.

Another example is from a company in the edge computing space I’ve been doing due diligence with. They manufacture cameras for satellites, but what differentiates them from other companies, is that their camera is able to do onboard processing of the images. The next step for this would be to analyse the images being captured to determine which are good quality and build in logic that enables the analysis to take place directly on the camera. So, instead of having to pass the data on to humans to analyse - which takes time - you could end up with essentially real-time analysis of the data.

Taking this one step further even, you could build in some rules to enable the camera to make decisions based on this analysis. A real-world use for this could be for autonomous agricultural machinery. For example, the camera could understand, from the image, the level of moisture in the soil and direct the machine to plant the seeds in the optimal position.

So what are the key applications that can be built now based on the type of data that’s being captured up in Space?

I think it’s important not to expect too much from Space data. I was a bartender straight out of uni, so I like to compare it to a cocktail. In any cocktail, there’s a very limited amount of ingredients. Depending on how you mix them, and in what proportion, you’ll get a different taste. It’s the same with Space data. You can get all sorts of data - hyperspectral, optical, radio imagery - of the Earth that allows you to track many different things: gases, heat, optical images, etc. But what’s crucial is building up the right mix based on the needs of the client.

You’re right. I always think, “where’s the money coming from?” It’s about what clients need today. 

Yes, so think about what industries are on Earth. Especially those that are still quite old-fashioned, like logistics. For example, I’m sending a payload from one place to another. Say I want to develop an application that helps to predict what the traffic is going to be like, where they're going to be, the bottlenecks, etc. That way I’ll know if something is going to get 10 days earlier, 10 days later, etc. I can develop this using Space data.

In many cases, all of the data is out there, but accessing and analysing it is extremely difficult. But when you take a different view - in this case literally a different view as you’re looking at the situation upside down from Space - you can get a different dimension on the data. And then suddenly these problems don’t exist.

The most powerful applications we’ve seen are the ones that are combining extraterrestrial (Space) data together with terrestrial (Earth) data. It’s really just making the data three-dimensional.

And it feels like this intersection is where the software innovation would happen. How to combine this data… I mean, most of the technologies are relatively old, and the challenge so far has been to get it ‘up there’. This was so expensive. But access to space has now been solved with SpaceX etc.

Yes, exactly. The innovation is really focusing now on the supply chain and application. As you said, access to space has been solved and the infrastructure is being developed. But this innovation we’re focusing on now is based on business problems around turning data into insights.

It’s something that many ‘Space people’ cannot solve because they don't know how customers are consuming this data... That's why the market of applications is extremely segmented. It's extremely segmented because you need to know the problems of the specific industry, the Space element AND how to combine the both. There aren’t many people who can do that.

Ok, so thinking about startups in this Space who have an idea. How should they pitch it?

It depends on whether they’re focusing on the supply chain or applications.

For supply chain startups, it’s important that Space isn’t your only business. You need to have diversified revenues and make sure there are applications for your product or solution outside of Space.

For applications, it’s more about the team you need, just like in any other tech startup. You need someone who understands the business problem, someone who knows about Space, and then someone who can translate for them both. Because these guys will probably never understand each other.

So what’s your prediction for the industry? Are we likely to see dramatic increases in applications and startups? Or are we not there yet? 

I think it’s definitely increasing, but we’re going to see more of an explosion once more data becomes available. Data is definitely still scarce, so it's very important to keep in mind where to get it.

On the one hand, you have so much data coming from Copernicus (the European satellite program), but how much can actually be used? It needs to be structured and indexed in a certain way, otherwise, it’s unusable. There will be more satellite constellations going into orbit over the next two to three years which should provide more usable data.

When it comes to commercial satellite constellations, there are two models of data sharing. The Planet Labs model, where companies want to keep the best data for themselves and develop analytical services to sell. The other is the Satellogic approach where companies integrate their data into a platform that others can use to build applications. Both models will exist together.

And going forward, for those who are providing the data it’s going to be the question of making the cheapest possible infrastructure and creating the most user-friendly network and well-structured data so that it’s easy and cheap.

But the other important, and perhaps most difficult, thing is to find a business model... That is the right customer, the right problem, and the right way to solve it. And yes, some of that information might come from Space. But why does it matter? A lot of people get hung up on Space, but it's not about Space. We don't have aliens paying money for anything. It's about looking at a business problem and seeing whether Space data can help…


I had such an interesting conversation with Bogdan, and covered a lot of different aspects of the challenges and opportunities around commercial Space tech.

Here are my key takeaways from our discussion:

1. You need to consider Space data like a cocktail. It’s about bringing together the right kinds of data in the right way to solve a specific business problem. And Space data might not solve everything. You will not only need to have the best data out there but also a good mix of terrestrial and extraterrestrial data. That’s where the real innovation will come from in the next few years. Very few players will be able to make this happen. Once available, this space data will allow us to implement many technologies on Earth that weren't good enough or possible before.

2. “Space is where the internet was 20 years ago.” We’re really at the stage of building a solid infrastructure for commercial Space exploration. So although things might seem to be slow-moving for the amount of money being invested, it’s laying the groundwork for real innovation in the future. Things are already moving fast, but we’re going to see more of an explosion of startups once the infrastructure is totally ready to make data more available.

3. “We don’t have aliens paying money for anything”. Remember, the problems we need to solve are happening on Earth. It’s easy to get swept up in endless possibilities that Space data can present, but all that’s useless if you’re not able to solve the problems we’re facing now.

4. Something we did not discuss in the interview is space manufacturing. From my discussion with 'space' entrepreneurs, it seems that, in the not-so-distant future, we will be able to manufacture in low gravity environments better, cheaper, and faster essential products we need on Earth. We are living in exciting times...

Last weekend I was in Belgium to meet some founders and friends. One of them just closed his fundraising round. Guess what? He got personalized beers to celebrate this significant milestone, of course! Belgium is a lovely country, but the best is the attitude of its people. I lived in Brussels for four years and have some of my best friends living there. To many more success stories for Belgium!

Life is awesome,


Other Content I found useful

- A great thread and summary by Jared on the seven notable downturns in the Emerging Cloud Index. Many friends asked me recently whether they should hold or sell their software stocks. Being a long-term investor, I usually (depending on their personal situation) suggest that the trends are clear (see this post) and that they should keep them. But that's just me. Here is another great additional insight (see third point below) seconding my thoughts. So, if you believe in a long-term trend, sticking to it seems to be the best option...

' Three key truths are:

1) The fundamental outlook for most software companies is unchanged

2) Long-term IRRs are meaningfully higher than they were three months ago

3) Timing bottoms is difficult and missing the first leg of a steep recovery is devastating to LT returns:

VC Europe



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