Dear readers,
Welcome to Quartz’s newsletter on the economic possibilities of the extraterrestrial sphere. Please forward widely, and let me know what you think. This week: OneWeb bankruptcy, spaceflight participation, and a Boeing bailout.
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The potential of satellite broadband has driven billions of investor dollars toward satellite mega-constellations.
Now, OneWeb, among the leaders in the field, is reportedly flirting with bankruptcy as cash reserves dwindle. Asked for comment, a OneWeb spokesperson noted that the company has made great strides designing its network, concluding that “we believe deeply in our mission to connect everyone everywhere…although fundraising in this current market is extremely challenging. We will share more information when possible.”
Founded by Greg Wyler and based on his vision for a low-flying satellite network, the company won billions from Softbank, the Japanese conglomerate led by Masayoshi Son. That key investor has run into hard times now, particularly as a big bet on WeWork failed to pay off in spectacular fashion last year.
The essential problem with a satellite constellation is that it requires years of capital spending, before any revenue comes in, to design and test the satellites, to build them, to launch them on expensive rockets and, oh, you have to design and test and build the ground systems, too. That’s not to mention hiring the lawyers to win regulatory approvals and the sales and technical support staff to find customers (or the strategic partners to do it for you).
OneWeb had raised about $3.4 billion toward this end, and is already flying 74 satellites. But its full constellation needs 650 or more, and the spacecraft have cost more than $1 million each, twice as much as originally anticipated. Getting into operation may require more capital and in case you haven’t noticed, it’s not a great environment to go around asking investors for big dollars—even as, ironically, the importance of increasing connectivity has never been clearer.
One complication for OneWeb was its very traditional approach to being a satellite company: Rather than doing most or all of the work in-house, it relied on a network of strategic partners and subcontractors, particularly Airbus for manufacturing its satellites and Arianespace for launching them. This helped the company garner credibility quickly, but it also means higher costs and more bureaucracy compared to competitors.
Chief among those competitors is Elon Musk’s crew at SpaceX, which was able to transition its spacecraft manufacturing experience to satellites fairly quickly, and has the all-important fleet of its own reusable rockets to launch them, which represents remarkable cost savings. Jeff Bezos’ Amazon is also building a satellite constellation called Kuiper, and while it doesn’t yet have its own rockets, it doesn’t, even in these troubled days, worry much about capital.
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Questions for…Anousheh Ansari
Ansari, the CEO of the XPRIZE Foundation, is an Iranian-American engineer and entrepreneur most famous for being one of just eight “spaceflight participants” to pay her own way as a visitor to the International Space Station (ISS). That was in 2006. The last tourist flew to the ISS in 2009. Now, more than a decade later, space tourism is returning to the ISS. Axiom Space is offering tickets for a visit on SpaceX’s Dragon spacecraft. So I caught up with Ansari, who was in Los Angeles, “not in orbit, unfortunately.”
Like everyone else, XPRIZE is suddenly reacting to the Coronavirus. What are you doing?
What we decided to do is to really start convening the thinkers, the doers, the innovators, the large institutions, the researchers…to create a place where they can share their research. If they need additional data scientists, wet labs to test their solutions, they need to talk to patients in China, for example, if they can share it with us, we feel confident with a network of people and resources we’ve built over the last 25 years, we can help connect them. Building this with [the health insurer] Anthem and bringing more partners to the table, our data collaborative will become part of a series of data challenges to look at better ways of predicting and preventing pandemics in the future.
What is your advice to the next generation of private visitors to the ISS?
People [ask] me, why you don’t like the word space tourist? Because when you’re a tourist, you’re basically packing your bag and taking your camera and you get on an airplane, someone is flying a plane, you have a crew that is taking care of you. When you are a spaceflight participant, you are an astronaut, you have trained for it. If something goes wrong, you’re there. For me as a spaceflight participant, I went through the same training as the other astronauts. The crew depends on you. You depend on the crew. It is a very serious responsibility. [Make] sure that you understand the responsibility that comes with taking that trip. The risks are very high.
You sponsored the ANSARI X-Prize in 2004 that many credit for kick-starting the new space sector. Virgin Galactic was built from the prize-winning vehicle and may fly its first space tourists this year. What do you think of that legacy?
It’s not just space tourism—I think it’s shortsighted for people to look at this as a space tourism industry. The ultimate goal of what we did, and space tourism is a byproduct of it, is reducing the cost and increasing the safety of access to space. One area that I continually talk about, my passion, is the fact that [the] growing need for data centers [is] causing a major problem for the environment. The data centers consume a lot of energy because they need electricity and cooling. Space is a perfect place for them—plenty of energy from the sun, and space is very cold. Putting the non-real-time application and services in orbit makes a lot of sense and reduces the burden on the environment.
You promote women in science, math and technology fields—where are you focused now?
I would personally love to see a lot more women in the AI and machine learning field, because I feel that is an area that will define many aspects of our world in the future. I see a big gap and I see the voices of women missing. I don’t want to see a world designed by men, and a world designed by machines that are biased [against] diversity.
What’s next for the XPRIZE in space?
Space debris is an issue that I think needs solutions. Asteroid detection and deflection is an area that needs some attention. We definitely would love to look at issues around creating permanent stations on the moon or Mars, and creating those closed-loop systems could actually have a lot of applications here on Earth. Maybe even a space plane that can take us from point A to point B.
This interview was edited and condensed.
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🚨 Read this 🚨
Stepping up, by stepping down. By the time many startup founders realize the importance of culture, of management, and of treating employees well, it’s often extremely difficult to fix what’s gone wrong. This week we dive into the reasons startups often fail, and why founders don’t typically make the best CEOs.
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SPACE DEBRIS
Boeing’s bailout. Boeing CEO Dave Calhoun says he has lots of options to save his struggling company, so he would refuse any federal rescue that requires giving the public an equity stake, which some economists say should be a condition in any bailout. One analysis of Calhoun’s attitude is maybe that the government doesn’t need to bail out Boeing if there is financing available in the private sector. Another analysis is that Boeing is already setting its own terms. The Washington Post reports that a $17 billion fund within Congress’ coronavirus response legislation has been designed specifically to help the troubled aerospace giant.
There be Dragons. While NASA and SpaceX still hope to launch a crew of astronauts to the ISS in May, there are problems besides coronavirus that may delay it. First, an engine failure on a recent SpaceX Starlink launch is now being jointly investigated by the space agency and its contractor; while that rocket made it to orbit successfully and had flown four times previously, the engineers will want to make sure they know exactly what happened before putting people on top.
More prosaically, a SpaceX test capsule was destroyed after being dropped prematurely from a helicopter during final testing of the parachutes that carry it back to Earth. Since the parachute system was not armed, the incident doesn’t reflect any issues with the spacecraft, but delays in completing the test program may push back the long-awaited debut mission.
China to fly new spacecraft. Due to coronavirus, the US is facing delays in key exploration missions like the Artemis lunar return and the James Webb Space Telescope. China’s space agencies say they plan to make a debut flight of the country’s new deep space exploration vehicle in April. The unnamed vehicle is comparable to NASA’s Orion spacecraft, which the agency hopes will carry astronauts to the moon.
It’s not real ’til there’s a logo on a rocket. Also pressing on: The Space Force and United Launch Alliance, which will be launching a new, super-secure communications satellite on March 26. The Advanced Extremely High Frequency (AEHF) satellites are impressive spacecraft indeed, but this also marks the first time we’ve seen the Space Force’s logo emblazoned on a rocket. John Kraus, one of the best space photographers working today, preserved the moment:
Your pal,
Tim
This was issue 40 of our newsletter. Hope your week is out of this world! Please send your predictions for OneWeb’s future, ideal structure for a Boeing bailout, tips, and informed opinions to tim@qz.com.