A space industry flush with startups and easy money struggles to tamp down all the B.S.

At a meteorology conference, a space industry consultant asked if I’d heard the news. He claimed the National Oceanic and Atmospheric Administration canceled plans to buy commercial weather satellite data. Since I hadn’t heard, I checked with NOAA officials who confirmed my suspicion. It wasn’t true.

Journalists have always looked for sources to trust and clues to help separate fact from fiction, but it’s never been more daunting than in this period of rapid change for the space industry. Startups make bold claims about their current technology, on-orbit performance and future prospects. Industry veterans, meanwhile, patiently explain why the claims are unrealistic or physically impossible. Neither side has a monopoly on candor. In the last couple of years, SpaceNews reporters have been warned of exaggerated test results, forged documentation and a padded resume. We’ve heard creative explanations for projects canceled or delayed.

An entrepreneur told a reporter the firm’s launch was on hold because the launch vehicle operator was having trouble finding additional passengers to share the flight. The launch vehicle operator offered a different explanation: the startup couldn’t pay for the flight.

Sometimes, it’s not clear whether allegations are true or false. In many cases, charges of deception come from competitors or disgruntled former employees, who may have their own axes to grind.

THE B.S. FACTOR

The problem of misinformation is not unique to the space industry. In any high-stakes business agenda there’s going to be some deception, said Van Espahbodi, Starburst Aerospace co-founder and managing partner. Still, business owners have a responsibility to think about their reputations and to learn to present their businesses competitively and appropriately, he added.

The problem of deception may be magnified in the fast-paced commercial space industry because entrepreneurs and executives face immense challenges. In some cases, companies are trying to invent technology or perform tasks no one has performed before. In others, they are trying to replicate the work of national space agencies or multinational corporations for a fraction of the cost.

“Often, people believe they can really pull off what they are trying and do not understand the complexities,” said Peter Klupar, Breakthrough Prize Foundation chief engineer and former NASA Ames Research Center engineering director. If the information entrepreneurs share is not factual, “it’s not that they are lying, it’s that they confuse reality with their desires. They so passionately believe in them that they fool themselves,” he added.

Entrepreneurs and space industry veterans say another reason for the recent surge in tall tales is that some entrepreneurs feel pressure to show rapid progress. Publicly traded companies face pressure to perform well quarter by quarter, but the stakes are even higher for early-stage venture-backed startups. The positive or negative judgment of a single high-profile investor can determine a company’s survival, said Ralph Ewig, former Audacy CEO. “In addition, the workforce tends to be very mobile, meaning lack of progress brings the added risk of losing your best talent,” Ewig said by email.

Investor relations personnel at publicly traded corporations carefully consider information before issuing news releases. “How do you translate that entire investor relations department to a lean startup?,” Espabodi said. “The challenge with good leadership is controlling information internally and externally to attract talent, investment and deal flow for competing in the market.”

Since not all news releases and public comments get the appropriate level of scrutiny, misinformation is widespread. There is “a certain B.S. factor,” said an industry veteran who asked not to be identified.

FACT-CHECKING

Founders of startups and established space companies are becoming increasingly frustrated by false claims.

If a startup raises money based on lies about the performance of its technology and then goes out of business, “I worry this will make people not trust us and not want to invest in space companies,” said Daniel Bock, CEO and co-founder of Morpheus Space, a German propulsion startup.

Established firms, meanwhile, are trying to sell proven hardware, software and services to customers who are sometimes being promised more capability and lower costs from startups making false or exaggerated claims.

“One of the reasons Maxar was so quiet about the specifics of the Worldview Legion constellation is because every time we said what we were planning to do, five startups said, ‘We can do that, too,’ ” said Walter Scott, Maxar Technologies executive vice president and chief technology officer. “We prefer to talk less and do more.”

How does anyone know who’s telling the truth? It can be hard for outsiders to assess a company’s progress, but there are ways to verify at least some of the claims. Observers track the movement of satellites in orbit. The Air Force publishes two-line elements showing spacecraft locations at specific times. People who study the orbital data provide valuable fact-checking.

“We can look at how the satellite’s orbit changes when a company fires a thruster,” said Tomas Svitek, president of Stellar Exploration, a small San Luis Obispo, California, firm focused on technology for space science and application missions. “Typically, I would also expect people to publish their results.”

Similarly, people who want confirmation a satellite antenna deployed correctly can calculate the satellite’s cross-section by looking at its orbit. It is also possible to observe how a spacecraft’s attitude affects its orbit. A spacecraft’s transition from random tumbling to target pointing attitude will have an impact on its rate of orbital decay, Svitek added.

Many investors also scrutinize the claims entrepreneurs make.

“Proper due diligence is the name of the game when it comes to investing,” Espahbodi said.

Tess Hatch, Bessemer Venture Partners investor and a former SpaceX employee, has little patience for dishonesty. “The second an entrepreneur exaggerates or fibs, it’s a hard stop,” she said. “I want to believe every word but I’m a conservative and realistic engineer.”

Not all investors can separate hype from reality. For some investors, “the sound bite often is viewed as truth that doesn’t warrant further investigation,” Scott said.

This article originally appeared in the Jan. 20, 2020 issue of SpaceNews magazine.