Flocks of cheap little satellites could transform the space business

ROCKETS are the thrilling, spectacular bit of space flight. But without something useful to carry they are basically just fireworks. To get a sense of the new entrepreneurial approach to unearthly enterprise, start instead with the radical changes in what it takes to make a spacecraft.

In Palo Alto, California, there is a factory that has been making spacecraft since the year Sputnik was launched, and before anyone in Palo Alto had heard of Silicon Valley. SSL, previously known as Space Systems/Loral, has built more than 100 communications satellites, of which 81 are still in operation today. The dozen or so currently spread through this warren of clean rooms the height of cathedral naves represent more than a year of the company’s order book.

They are all based on the same structure: a cylinder 1.2 metres across enclosed in a square box. The more the satellite has to do, the taller the box it is built on, the longer its solar panels and the larger and more complex the array of antennae and reflectors through which it sends data to its earthbound clients. Sky Muster II, nearing completion, is among the biggest. Designed to provide broadband communications across the less densely populated parts of Australia, it stands nine metres tall, with a complex array of reflectors tailored to serve the outback.

The communications-satellite business is dominated by four operators, Eutelsat, Inmarsat, Intelsat and SES. They make most of their money from companies that want to send television signals to people’s homes, but also serve markets for data transfer and mobile communications. They demand ever more of the handful of aerospace companies like SSL that have the expertise to compete for their custom, says Paul Estey, head of engineering and operations at the factory.

The industry is innovative but also very loss-averse. The smallest of the SSL communications satellites may sell for $100m or so, the biggest for perhaps three times that. Add on $100m for the launcher, and the satellite may not start showing a profit for a decade. Because of the need for a long lifetime in a hostile environment with no chance of any repair, a new technology that carries any significant risk will simply not be flown.

An hour’s drive up Route 101 you will find a very different spacecraft factory. Planet, until recently known as Planet Labs, occupies a shabby-chic building in the South of Market area of San Francisco. A room the size of a largish Starbucks on the ground floor houses the desks and tools needed to build 30cm-long satellites each weighing about five kilos. If you know what to look for, you will recognise many of the components as coming from other sorts of device, most notably smartphones. Making one of these “Doves” (pictured), as Planet calls them, takes about a week. At the back of the room there are dozens packed up ready to be shipped off. This is the new face of space: small objects, large numbers.

Doves are part of an extended family of very small satellites known as cubesats. In the late 1990s researchers at Stanford University and California Polytechnic State University in San Luis Obispo realised that a certain amount of standardisation would make very small satellites much easier to launch. They came up with a standard called the “1U” cubesat: a box 10cm by 10cm by 11.5cm with electronic and physical interfaces that would allow it to fit alongside others of its ilk in a dispenser that could fly as a “secondary payload” (launchers often have more capacity than they need for their main cargo). The standard caught on. By early 2013 some 100 cubesats had flown, and the tools required to design and build one were so well developed that a class of schoolchildren with an inspired teacher could take on the task.

Planet’s founders, Chris Boshuizen, Will Marshall and Robbie Schingler, thought cubesats might be the basis of a business. While working at NASA’s Ames Research Centre in the early 2010s, they looked at what could be done with the largest telescope that would fit into a “3U” cubesat, three 1Us stuck end to end. Pointed towards Earth from a low orbit like that of the ISS, such a telescope could take pictures with a resolution of five metres or a bit better. That was nothing like as good as the images being sold by companies using bigger telescopes in much larger satellites. But 3U cubesats could be deployed by the dozen or the hundred. For some markets, such as agricultural monitoring, the sheer quantity of the information gathered by such flocks might make up for the low resolution.

The first 28 Doves were sent up from where they were deployed to the ISS in 2014. The launch was celebrated at Planet’s headquarters with a pancake breakfast, as has been each of the 13 launches since. Planet currently operates 63 spacecraft. Their capabilities may be limited by their size, but the company claims that the sophistication of their technology is a match for any satellite anywhere. And they support a promising business model. Mr Marshall says Planet now has over 100 customers for the data that the Doves send back. It looks poised for significant growth.

Planet’s success stems partly from the continuously falling cost and rising capability of consumer electronics—especially components for smartphones, which sell by the billion and where size and low power usage are crucial. But that would be of no use without a willingness to improve the satellites frequently—indeed, incessantly. By June this year the Doves had been through 14 upgrades. Today’s spacecraft have a different camera from their predecessors, new antennae, rebuilt electronics and a power system based on the lithium-ion battery packs used in Tesla cars, rather than the original AA battery format. The satellites now “see” in four colour bands rather than the original three. They have become much better at telling where they are and which way they are pointing. According to Mr Marshall, in terms of performance per kilo the Doves are now 100 times better than the state of the art five years ago. Such agile innovation is normal in Silicon Valley, but it is not something the satellite world has seen before.

Fly, my pretties

To do things this way requires an attitude to risk alien to the world of big, expensive satellites: Planet expects some of its innovations to fail. It knows that Doves launched from the ISS have only a short life anyway, re-entering the atmosphere after nine to 18 months aloft. This attitude speeds up progress and provides resilience for the company as a whole. A big communications satellite can carry the fate of a whole company with it. When Astra1A, the first dedicated direct-broadcast television satellite, was sitting on top of Europe’s first Ariane 4 rocket in 1988, Rupert Murdoch knew that if it blew up, his nascent Sky broadcasting business would blow up with it—quite possibly taking the rest of his media empire down in flames too. Planet has twice had the bad luck to see a flock of Doves fall to Earth from the fiery wreck of a failed launch, and lived to tell the tale.

A company can welcome risk only if its investors take the same view. Planet’s do. This is another consequence of building a business on small, cheap satellites; the amount of capital needed is relatively modest. Planet has raised almost all its capital from Silicon Valley angel investors and venture funds. Just as technological improvement can be accelerated when your satellites weigh just a few kilograms and have parts lists in the 1,000s, so getting funding is a lot easier when their cost is a few hundred thousand dollars or less. The total invested in Planet to date, after three rounds, is $158m; at SSL that would buy a single satellite.

In 2001-05, venture investments in space businesses worldwide totalled just $186m. In 2011-15 they had risen to $2.3 billion, according to a study by the Tauri group. Half of those investors were based in California, and most of this money has gone either into small satellites or into new launchers tailored to those satellites’ requirements. Venture capitalists feel increasingly at ease about the technology involved.

The business aspirations of companies like Planet are familiar, too. As the Tauri report puts it, the new wave of space companies has been able to sell itself to VCs as a way to “follow the path terrestrial tech has profitably travelled: dropping system costs and massively increasing user bases for new products, especially new data products”. Fashion is another factor. Like Doves, Silicon Valley investors flock; the past few years of success for SpaceX, founded by one of their own, has made space a particularly appealing place for the flock to settle. This new source of capital looks like producing a great many satellites. In July Euroconsult, a consultancy, estimated that in the period from 2016 to 2025 some 3,600 commercial small satellites might be launched, including over 2,000 flown by VC-funded Earth-observing companies.

Others, including some with deeper pockets, want to take the smallsat revolution further. Today’s big communications satellites are almost all to be found in an orbit 36,000km above the Earth. This is because, at that height, it takes them 24 hours to go round once—which means that, seen from the ground, they seem to sit stationary in the sky. In businesses that depend on a single antenna pointed in a single direction, that is a huge advantage. But it has costs. The amount of data you can handle with a given antenna and amplifier drops off according to the square of its distance from the surface. This means that closer to Earth you can do more with less. You can do it faster, too: going 36,000km up to “geostationary” orbit and back again delays a radio signal by a quarter of a second, a problem for some applications.

All the same, communications satellites have mostly forgone the advantages of lower orbits, for two reasons. The lower the orbit, the more satellites you need to make sure one can always be seen from the ground. And satellites that move across the sky require receivers that can track them. This does not mean moving dishes; today’s receivers can track electronically. But such technology is demanding.

The more the merrier

OneWeb, a project being put together by, among others, Intelsat, the Virgin Group and Airbus Industries, is based on the idea that modern antennae can surmount this communication problem, and that the smallsat approach can sort out the coverage problem. It plans to use some 648 satellites in orbits just 1,200km up to offer seamless communications to any spot on Earth. Its business plan turns the need to cover everywhere to cover anywhere into a feature by focusing on developing countries; nowhere will be too remote for it to serve. The first satellites are to be launched next year.

This is not something you can do with cubesats, or on a startup budget. OneWeb is a multi-billion-dollar proposal. Its prototypes are being made at an Airbus plant in Toulouse. In Florida OneWeb and Airbus Space and Defence are building a factory where they hope to produce up to four 150kg spacecraft every day, using highly automated systems; that is more by an order of magnitude than anything the satellite world has seen before.

Not only is the project technologically very ambitious; it also faces a lot of competition. Google, where OneWeb’s innovators were working at one point, is looking at stratospheric balloons as an alternative way of providing connectivity in the developing world. Facebook is eyeing high-flying solar-powered drones.

The incumbent communications-satellite industry is paying attention, too. At Google the OneWeb founders worked on a system called O3B, named for the “other three billion” people not yet getting data services. After they left, the system went forward without them. When it is finished, it will consist of 20 satellites orbiting at about 8,000km. This summer SES, one of the big four comsat operators, took complete control of the project, buying out Google and its other original partners. Meanwhile SpaceX, which until now has operated purely as a launch provider, is talking about a low-orbit communications system of its own, with perhaps 4,000 small satellites. That one project would use three times as many spacecraft as there are in the skies today.