The Coming Gold Rush of Space Manufacturing
Why China is well positioned to lead the biggest industrial revolution in the history of mankind
I. Setting the Stage
Space is beginning to see a resurgence. What started with a few billionaires like Musk, Bezos, and Branson pouring cash into new rocket companies has resulted in new startups being formed attempting to take advantage of the new Space Race.
And it’s not just hard tech. It’s content strategy fingerprints are all over Hollywood lately. Luxury fashion brands like Coach and Chanel’s latest runway feature rockets ready for blast-off. It’s even reached the middle market with Budweiser’s latest campaign.
We’ve previously written about our Space as a Platform thesis, as well as a short deck describing what new space startups and investors should be focused on. You can also read through our entire Space channel.
But as we ponder the almighty chess game of business, we’ve found most all roads lead to the same place: space manufacturing. And who, if not China, has developed the skills and experience of how to manufacture the world’s goods at scale.
As any great engineer will tell you, you automate a manual process that people keep repeating.
II. Space Startups
As we’ve shown previously, the number of startups focused on space has been growing exponentially in recent years. But compared to the sheer volume of all funded startups, it represents a drop in the bucket.
To put this 200 space startups into perspective, we did a simple Crunchbase Pro search of all startups that closed any funding round in the last 2 years. Take a wild guess how many there were.
33,308 startups closed a funding round since March 2015.
That means Space funding only represents 0.6% of the total number of startups funded. If we do a search for “Space Travel” startups in the same Crunchbase database, we only get 79 companies. Here’s a link to a simple spreadsheet listing them.
So basically, you can surmise that nobody believes Space is as good of an investment as social media, photo sharing, or SAAS products.
That means we have a battle on our hands to prove to the rest of the world that this coming gold rush is very much real. And potentially the best way to do that is to show who is already investing in it.
If you respect what these people have done in the past, and believe that they’re smart enough to understand the value and aren’t just throwing money away, then you might have to agree with them on the outcome. The two big boys are Musk and Bezos.
III. Requirements to Getting There
When you dig into what many of the current high-flying Space startups are focused on, you begin to see the gaping hole that nobody is focusing on. Namely, the Intelligence and Robotics piece.
If we are going to get to space, settle there, build there, and make things there, we’re going to need an extra pair of hands. No longer is it good enough to assume we’ll have a massive work force living in Low Earth Orbit or colonizing Mars.
We believe Musk said it would take something like 100 years of constant back-and-forth trips to get a 1 million-person settlement going on Mars, which is what’s required to be self-sustaining.
If we’re relying on humans to do all of the necessary work, then we’ve failed before we’ve even begun. But even so, we’re aren’t yet focused on the things that are necessary to have humans survive in space. For example:
As you can see, we have quite a ways to go.
IV. China’s Preparations for the Gold Rush
In one bit of news that likely slipped by even the most discerning of radars, in the tail end of 2016, a university in the UK partnered with China’s space program. For what, you might be asking? For manufacturing their space station, of course.
From the article:
- University’s Advanced Manufacturing Research Centre (AMRC) signs agreement to launch new joint research institute with the Shanghai Academy of Spaceflight Technology (SAST)
- SAST is working on the development of the Tiangong Space Station, scheduled for launch in 2020
- AMRC will work with SAST to develop thin-walled structures for commercial rockets
What began as only the 3rd country to launch a human into space, they’re now projected for 30 launches in 2017 alone. That’s about one launch every two weeks. Does that frequency remind you of anything? Namely, a two-week sprint cycle for software development.
And we’re squarely back into our “when push to PROD means launch into space” thesis.
According to Wikipedia, the China Aerospace Science and Technology Corporation had revenue of $43 billion in 2013. In January of 2017 they released a white paper detailing their plans in space over the coming five years. Below are the exact words copied from their press release:
- Work will go on in the basic nuts and bolts of the space industry, with extensive research breaking new ground in essential technology
- Around 2018, the Chang’e-4 probe make the first soft landing on the far side of the moon.
- By 2020, China’s first Mars probe will be launched to carry out orbiting and roving exploration, and a BeiDou network consisting of 35 satellites will provide comprehensive navigation services around the world.
- China will activate a heavy-lift launch vehicle project in the next five years.
To summarize: landing on the moon, Mars rovers, multiple satellites, and a heavy launch vehicle. They are essentially copying the roadmap laid out by SpaceX for heading to Mars and Blue Origin for heading to the Moon.
These are China’s current products and services:
China has become so good at copying luxury hand bags and reverse engineering Silicon Valley, that they’re now starting to do the same with their space programs. Expect them to keep leveling up, and use their billions of skilled labor expertise to include manufacturing in the mix, once we figure out how to mine metals from asteroids.
V. What’s Next
The Space Angels network published a story about the untapped potential of manufacturing in space. They look at the market slightly different than we do. Below is a graphic of how they see the future economy playing out, as of 2016:
You’ll notice the logistics piece, which is squarely in Amazon’s territory of expertise. Bezos is no dummy. He’s using the people and expertise developed on-ground, then shifting it straight up. You might see China’s future space manufacturing operation being fulfilled by Amazon Space to ship it straight to your door from a few miles above you.
That’s why he’s building rockets. Not to go to Mars, but to go to future profits.
And that’s the problem with SpaceX. They don’t have any sort of voluminous consumer relationship. A bit with Tesla and Solar City, but nowhere near that of Amazon. So, if SpaceX tries to get into the Space Shipping market, they’re going to be competing against the 800 pound gorilla that is Amazon Prime (now shipping from space).
Your Recommended Reading
- Space as a Platform
- Space Startup & Funding Deck
- The Threat of China’s Space Program
- Robot Operating System 2.0 Update, Jan 2017
- Biologic Intelligence Channel
from Stories by Sean Everett on Medium http://ift.tt/2mQXTyZ