a16z Podcast - Engineering Rapidly Reusable Rockets

Episode Date: September 22, 2023

The space industry is evolving rapidly, with the cost of launching payloads to orbit dropping significantly. But who's investing in this sector, and how will it evolve? In this episode, we delve into the transformative journey of the satellite industry with Andy Lapsa, co-founder of Stoke Space. With over a decade of experience at Blue Origin, Andy is now at the forefront of sustainable space travel, pioneering fully reusable rockets.Don’t forget to check out Part 1 in this mini series, where we explore the public and private players in space with John Gedmark from Astranis. Resources: Learn more about Stoke: https://www.stokespace.comFind Andy on Twitter: https://x.com/AndyLapsa?s=20 Stay Updated: Find a16z on Twitter: https://twitter.com/a16zFind a16z on LinkedIn: https://www.linkedin.com/company/a16zSubscribe on your favorite podcast app: https://a16z.simplecast.com/Follow our host: https://twitter.com/stephsmithioPlease note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.

200 years ago, we were sailing around on wooden tall ships. That's how we got across oceans. And in those days, transportation was slow, expensive, and unreliable. And in many ways, those are exactly the three words that describe space transportation. You know, you'd never throw away a 737 after every single flight, right? That's pretty obvious. And so the same thing is true with rocketry. There's no reason you would want to throw away the vehicle if you didn't have to.

Start asking yourself questions, what are the important problems that need to be solved and how can I go and do this in a way that's a sustainable business? We're in like the 1930s and 40s for space. We have a lot of different ideas that are being tested. And in my opinion, mastering the first stage reuse and the second stage reuse are the two ingredients that are going to lead to mega consolidation and then also a healthy and thriving economy. Hi, everyone. And welcome back to the A16D podcast. This is part two of our mini-series on the booming satellite economy. In part one, we spoke with Astronis co-founder John Gedmark about the opportunity to build smaller satellites in geostationary orbit and who's actually buying that satellite capability. But ultimately, in order to build this computation shell around Earth full of thousands of satellites, rocket usability is an important unlock.

So today we're joined by Andy Lapsa, co-founder of Stoke Space, who after spending over a decade at Blue Origin, is now on a mission to build fully and rapidly reusable rockets with the hopes of reusing both stages and also allowing daily reusability. Like Astronis, Stoke is growing quickly and also has customers in both the commercial and government sectors. And if you need any convincing of just how hard this engineering challenge is, Well, the original launches of the Falcon 1 failed due to things as small as a corroded nut. And between launches, it might take as much as a year to get something back in the sky. So what are we looking at now in terms of testing cycles, given that we're on Falcon 9, and also new companies like Stoke are trying to get in on the action? So listen in as Andy gives a glimpse into this truly outworldly engineering challenge

of not just getting to space, but also doing so reliably over and over and over again. All right, prepare for liftoff. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see

A16C.com slash disclosures. Andy, thank you so much for joining us today. Thank you for having me. It's great to be here. All right. So it's rare that I actually get to talk to someone who's been in the aerospace industry for over a decade. You started at Blue Origin and you've continued on to now found Stokespace, which we will get to. But tell me a little bit more about how you started and why you've also continued to be so interested in this industry. Well, I think, first of all, I love it and loved it as a child and continued to love it today. Jeff Bezos obviously worked for him for quite a while, but he used to say your passions choose you. You don't choose your passions. And I really love that. I think it's true. And so, yeah, this is a lifelong passion for me.

I went through grad school, did mechanic aerospace, did like fluids and combustion type experiments in grad school, went to Blue Origin. It was a super small company at the time, and I loved the small team and kind of scrappy environment at that time, and it's continued on today. Amazing. Well, you mentioned Jeff Bezos, and there's this famous anecdote. I don't know how true it is, but it was back when he was working, I think, at a hedge fund, and he heard the statistic where the internet was growing, I think, 10,000 percent a year or something like that. And to him, that was a meaningful data point to say something really concrete about the future. And that ended up leading him to founding Amazon.

And we all know the story from there. Was there some sort of insight, some data point, some anecdote from someone else that you had heard that caused you to actually maybe leave Blue Origin and decide, I need to actually found Stoke. And I also need to go all in on reusable rockets. Was there something that drove you to do that? I don't know if it was as clean an anecdote as what you just conveyed for Amazon, but what I would say is it's kind of an eventual aha that led me to do it. Okay, so there are a couple different, very important ingredients that I realize they're all coming together right now and are going to lead to something very big. I actually kind of grew into thinking that it's kind of a moral imperative for us as humans to develop space and do it in a way that actually benefits the Earth. think a lot of people who are in the space industry think the same way. So maybe that's number one. Number two, I think we're at a very, very unique point in history. Okay, we finally have the ability. We know we can get to space. We even know we can get back from space. So there's

a technical know-how. There's incredible engineering tools that have just kind of become prolific in the last 10 to 15 years. So engineering tools, analysis tools. So we can now do things with teams of 100 people that took tens of thousands of people in the 60s. It's incredibly powerful. So there's that ingredient. There's, you know, kind of the micro-scaling of electronics and capabilities for compute, for image processing, for telecom, right? All of these things are now miniaturized. And so you can do with very small form factors what used to take RV-sized buses, right? So now all of a sudden, the mass and cost economics makes sense for kind of prolific space assets. So there's that ingredient.

And then there's renewed geopolitics that are starting to factor very heavily in the way that we secure our sovereignty for ourselves and for our allies. That for 30 years was relatively uncontested in space, and today that's no longer true. So all of these ingredients kind of come together, and they've only been kind of coexistent in the last, let's say, three to four. years. It's all very new, but now is the time to do it. And I think also, maybe this final thing, there's urgency around it, right? I think our civilization is fantastically intertwined and delicate, and that time-bound window is bounded. It's a relatively narrow window. We've got to get it right now within the next 20, 30 years, or else that window can very viably close. So now is the time to do it. On your website, you say, how do we grow as a civilization without destroying our

home. Can you elaborate a little more on what you mean by that and this window that you're perhaps talking about? Yeah, I'm a little bit dated on the statistic, but one thing that will never leave my retina is if you look at the way that our civilization has scaled, over the last 200 years, we've gone from something like half a billion people to 8 billion people. And when you plot that over the course of history, it took, you know, it's unknown, tens of thousands of years to get to that original half billion people. And then just three, four, five generations. And then just three, four, five generations to go from half a billion to eight billion. It's unbelievable. And I think that there's a lot of questions over what impact that has on our earth, our civilization, and our ability

to continue scaling. Nobody really knows the answer to that question. And so I think space is a very, very, very, very important pillar to be able to figure out and learn what that impact is and how to best position ourselves to continue scaling without, you know, kind of destroying the habitat that we have. That's number one. And number two, in the long run, we know we've got to scale beyond Earth if we are going to continue scaling. So there's maybe three different trajectories of human scalability. One is we continue to grow. One is we stagnate and level off. And the other is that we decline. And I think the most exciting one for us to pursue is the one where we continue scaling. So we've got to think about how we do that, but also not make that lead to a decline.

Yeah, so you're basically saying, we're pursuing two paths. The first is a better understanding of what we are actually doing on Earth. So as you said, like monitoring rainforests, understanding how different parts of the atmosphere are changing over time and what's in them, migration patterns. You can all see that better from space. Yeah, so you can learn those things, but you can also find efficiencies. So for example, agriculture, right? We can now experiment and understand agricultural efficiencies better. We can understand water flow. and water patterns. We can predict drought. We can predict and know where our freshwater supplies are season to season and across borders. And so there's a lot of efficiencies that we can gain. Right. Right. We've benefited in order to scale from that half billion to eight billion, we've benefited from a lot of efficiency, technology-driven efficiencies. And space is a big piece in doing that as well. Maybe a silly question, but let's just use water flows as an example. How did we do this before we had satellites monitoring this? Was it just like people measuring on the ground or we just didn't know?

Yeah, right. We took it season by season, right? You know, people can go and look and measure ice packs. So in a lot of, you know, I guess geologies, the water supply, the freshwater supply is from melting ice packs. So you measure ice packs season to season. But, you know, you go back not very far in history and people said, you know, it's some divine intervention that's dictating these droughts or not, right?

And so... Now we know more. Now we know better. We know more, now we know better, and we want to take that to the next level. Yeah, so in addition to having a better understanding of what we're doing on Earth, why do we need, in what seems like a sense of this capability turning exponential as well, we're able to, as Stoke is working on, build reusable rockets and really increase the amount of satellites that we're putting up there or the capability for us to go up at a frequency

that we've just never seen before. Why is that necessary, given that we have been putting satellites up for decades? And last year, I think in particular, we saw almost 200 successful rocket launches. So give me a sense of why we need to increase this capability to the point where we haven't seen before. Okay, so that number 200, I think it was like 190 or something, that number is a world record for us, right? But if you look at any other mode of transportation, that number is. just paltry. It's pathetically small. And if you want to grow a thriving economy in space, it's absolutely just not going to get it done. I think a very appropriate analogy is if you

think about our ability to move across continents through ocean, right? Again, like shockingly recently, 200 years ago, we were sailing around on wooden tall ships. That's how we got across oceans. And in those days, transportation was slow, expensive, and unreliable. And in many ways, those are exactly the three words that describe space transportation. And in not a very long amount of time, you know, we invented steamships, we invented steel halls, eventually we invented aircraft, and now we move transcontinental transportation, you know, super readily. But if you go back to those tall ships days, you know, can you imagine a world where this is the way we get from one continent to the other. Can you imagine saying, you know what I'm going to do? I'm going to

outsource manufacturing overseas because that's more cost efficient. There's absolutely no way you would ever do that, right? And I think space is very similar. It's slow, expensive, and unreliable to get to space. And in that world, it's very hard to imagine manufacturing things in space. It's very hard to imagine gaining resources, going on vacation, those types of things, except for a very small slice of applications or people. And so, to me, that's the same opportunity we have, right? It's like transcontinental trade, except now we can do it in space, provided we solve the mobility challenge.

I actually love that you brought up trade because most people, like if you think about commercial flights, they think about them being transported. And the same analogies often use for space where people are like, oh, well, do I really need to go to Mars? And that's the frame they take, but they often don't take the frame of, you know, someone 100 years ago would never have been asking, like, do I need an iPhone chip made in Taiwan? They wouldn't think about that because they would never have dreamt of the iPhone, let alone where the chip within the iPhone is being made. And so if we move towards reusable rockets, can you ground us and where we're at in that trajectory?

We talked about almost 200 successful rocket launches last year. how many of those even used any reusable components, and then also, where do you see us going? Well, let's go back. It's been very interesting. I mean, I've been in the industry for a decade, but I also feel like I'm still new to it. That's a good sign. Yeah, I guess so. 10 years ago, we'd never reused any rocket. There was one demonstration of reusable rocket, which was the DCX and did relatively low altitude flight and landing. And in fact, the 30-year anniversary of that is coming up. But other than that, it was a huge unknown if we can do something, go to space or high altitude and come back and land these things. And so, you know, SpaceX has obviously changed the way we think about that and to some extent of the origin as well.

Okay, so let's see. I think SpaceX flew 61 times. They're the only company doing any level of reusability. Most rockets use two stages, the first stage and the second stage. SpaceX reuses only the first stage. I think they did that, something like 52 times last year. And so, yeah, I mean, out of the 200 launches to space, if every rocket is a two-stage rocket and 50 of those stages were reused,

then that's something like 400. A quarter. Yeah. So it's a quarter of them use some sort of reusability, but they're only using partial reusability, only in that first stage. Yeah. So could you break down the different stages, what that even represents and why it's important perhaps not to just have a reusable first stage,

but also something it sounds like Stoke is working on is the reusable second stage. Okay, so I think the first part of reusability is obvious. If you go to an aircraft analogy, you know, you'd never throw away a 737 after every single flight, right? That's pretty obvious. And so the same thing is true with Rocketry. There's no reason you would want to throw away the vehicle if you didn't have to. you want to amortize the cost of that vehicle over many flights. Rockets are typically two-stage vehicles, and that means the first stage is used to basically

punch yourself out of the atmosphere, give yourself a little bit of downrange, but then the second stage is the thing that actually gets you the rest of the way into space. But the first stage is the biggest thing on the rocket usually is between 60 and 70 percent of the total cost, production cost of the vehicle, and so that's the obvious place to start in this quest for reusability. Let's figure out how to take the biggest cost component and reuse that. So that's what SpaceX has done.

And then, you know, to finish that and take it to its logical conclusion, you also want to reuse the second stage. But here's what's very important. When we talk about scaling the space economy, you've mentioned the record number of launches. SpaceX set the record last year with, I think it is 61 launches in a year,

and I think they're on pace for mid-70s, mid-to-oper-70s this year. again, that's huge. That's a record for the industry, but it's still paltry in the grand scheme of transportation and logistics. And so the question is, how do you scale that number up? If you are not reusing the second stage, the only way you can scale that number is by scaling your manufacturing facilities, scaling your test facilities, scaling the touch labor it takes to certify these components, all of those things for every flight. And still you're left with a vehicle where every single mission is a maiden voyage. So that, again, has cost and reliability and availability

issues with it, right? Okay, so the reusability of the second stage not only lets you amortize that remaining 30 to 40% of the cost of the vehicle, but it also totally changes the way you think about how to scale the flight frequency and how reliability manifests itself, because now you have flight proven hardware on every mission instead of a maiden voyage. That makes sense. And from my understanding, it also takes some time even for SpaceX between Falcon launches to reuse that first stage. From one stage being used to the same stage being used again, I think is 21 days. And so what are we working towards, you know, what would success look like in the full scope of reusability? I think rocketry is another level of challenge over aircraft.

And I think a daily reuse is an achievable goal. So if you fly and land the component tree and fly it again the next day, that's a very worthy and achievable goal. Not an easy goal, but it's an achievable goal. What would you say are the biggest challenges, and I'm sure there's many, but maybe the few things that you thought, okay, if we're going to figure this out, these are the few things that we need to attack and we need to solve. The biggest domino that remains to be knocked over in this whole quest is the reusable second stage. That's the thing that hasn't really been solved by the industry. yet fundamentally. And is there some part that's really like engineers haven't been able to quite solve? So the second stage goes all the way to space and then in order to get it back

has to come back through the atmosphere. And you're probably familiar with a shuttle coming back in or capsules coming back in. They kind of glow red hot. They need to survive the heat of reentry. And that is an engineering challenge, which to date has been solved by basically high temperature materials, brittle ceramic tiles in the case of the shuttle and now starship, or a material. And a that actually burns away. So you can coat the whole thing with, like, cork, and it will burn away on its way down, and it'll protect the vehicle and allow you to do the mission. But that's obviously not reasonable, right? So you'd have to replace that component. In either one of these cases, like the shuttle, I believe the number is 30,000 person hours are spent on every single shuttle mission, inspecting and refurbishing the heat shield tiles. Okay? It's a shocking number, right? And so that's what you have to solve. In order to reuse in a day, you have to focus on the minimum number of things that you need to do to get this thing up in the air again. You have to focus on reintegrating things, getting the payload on, refueling, and then flying. There's no time for inspections.

There's certainly no time for refurbishments. And so you've got to design a system that's so robust where you don't need to inspect and you can still have 100% confidence in mission success. right? And so that's what it all comes down to. And that was, you know, that's kind of like the founding thesis and question mark we had when we started. Can we come up with a solution that checks those boxes? In our opinion, the ceramic tile solution will never check those boxes. They're just too brittle. You know, I think Starship has 20,000 tiles or so on its hull, and I think they will be eventually successful, but it's a fantastic engineering challenge. to get right at all. And then the question is, how does that look not only between flights

one and two, but from flights 20 to 22 or 100 to 101 and, you know, whatever, right? And over the course of that lifespan, things are going to happen. You're going to take bird strikes. You're going to take ice strikes. You're going to have mechanics drop wrenches on it. You're going to have the man lift that's 10 stories tall, sway in the breeze and bump the hall. And the question is, what do you do then? Is it good to go? Do you have to inspect it? I don't know. But that's the level of comfort you have to get to. And so, yeah, our solution is a metallic, actively cooled system and I think checks those boxes. It seems a little surprising in a way that given your description of the ceramic tiles,

how many they are, the amount of refurbishing or checking that they need, is it just that SpaceX is solving a different problem with Starship and that they aren't tackling or even trying to tackle a daily use rocket? And they're really using their system for a different purpose. Walk us through how maybe others haven't pursued a different path because it seems, yeah, a little surprising that this would be the engineering solution that has been developed. I think it is a little surprising. I think from everything I can tell, they're trying to solve the same problem. They're doing it in a different way. And I know very early on, and it's publicly available, that they did pursue non-seramic tile-based solutions

early on, I'm not really privy to the details of why they pivoted, but I can make some extrapolations that I think would explain why they pivoted, and it also explains why we've gone with very certain architecture that we've gone with. One of the enabling factors for us is using liquid hydrogen, which is different. SpaceX has chosen a different fuel methane or like the natural gas for their upper stage. But we found we needed to use hydrogen in order to cool and protect the vehicle in this way and at the scale that we're building. Maybe we could pivot and talk a little bit more about how much all this costs. And I know that with many technologies, cost is very significant up front. And if we really unlock the kind of technological developments we're looking for,

they can exponentially decrease. I think, you know, Moore's Law is probably the most prevalent example or the most familiar example for folks. But where are we in that curve in terms of how much this all costs, how that cost is relative to maybe the non-reusible rockets out there. And yeah, where you see that going? So in terms of payload to orbit costs, you know, 10 years ago, Atlas was probably the best vehicle from commercial use cases and they were about $15,000 per kilogram. Falcon 9 has disrupted that, obviously. They charge $6,500 per kilogram for ride share missions. I believe the latest pricing. If you want to buy an entire Falcon 9 for yourself, I believe that's something like 67 or 70 million. And if, which is a big if, if you fill up

every single kilogram of capacity to the lowest Earth orbit, it's about 22,000 kilos. So that's $3,000 per kilogram. So what SpaceX has done is provided, I would say, gains in availability. availability and also, let's say, a 3 to 5x improvement in cost, which is huge. And that's what's created a lot of the buzz and a lot of the new space ecosystem, the space economy that's now beginning to take off. But I would claim that there's another factor of 20 in improvements that are available in terms of cost if you do knock down full reusability. And that benefit comes from kind of a twofold effect. The first one we talked about, obviously, you are amortizing the cost of the production of the vehicle across many, many missions.

But the second one is maybe less obvious and less talked about, and that is that, you know, this enterprise that we're doing to manufacture rockets on the scale, to operate them, to develop them, requires a standing army. It requires, you know, capital infrastructure. And if you look holistically at the cost of the business, those are all very real costs. And so if all you ever did was amortized the cost of the vehicle and made a reusable vehicle but only flew it, you know, a handful of times a year, then it's only a small number of revenue generating events that you can use to quote-unquote amortize or distribute across the rest of the cost of the business. And those are real cost drivers that you have to pay attention to. You can't just look at

marginal cost. Okay, so flight frequency then is the thing that you can go after to really solve that part of the equation. And that's where the rest of that factor of Tony comes from. is by flying frequently and being able to share the cost of the business across many, many revenue generating events a year. Yeah, and something else that maybe is less obvious is that if you start launching more often and you actually have a frequent regular schedule, that perhaps unlocks folks on the side of actually buying the service

or actually participating in the business, wanting to ship satellites more frequently, having the option, if it is fully reusable, of bringing those back down, adjusting them, And so let's talk about that, this real business of satellites, the satellite economy. It's unquestionably a flywheel that begins to, you know, it's a virtuous cycle that begins to self-reinforce. The most obvious use case for space today, the highest revenue, is telecom constellations of telecom satellites. Okay, so if you are starting your own telecom constellation, first of all, I think the way this industry shakes out is going to be somewhat terrestrial telecom.

you're going to have three, four, five major companies that all compete but dominate, you know, global telecom. Okay? So in this world, think about your cell phone. Think about download speeds for your cell phone. You've gone from 3G to 4G to 5G, LTE, whatever. And those things increase, let's say, on a, let's say, three to five year cycle, right? Something like that. Yep. I think you should expect the same out of satellite technologies. But what that means is that if you're a global telecom in orbit, you're going to have to upgrade your satellite constellation every three to five years because you are in a healthy competition and if you don't you're going to die okay so that's the useful life of these satellites in my opinion in a mature competitive environment and what you care about is the time from factory

to revenue for each of those satellites i think a lot of satellite business cases a number to put in your head is probably something like 500 000 to a million dollars per satellite per month of revenue. Oh, wow. You want to get your satellites from factory to orbit to revenue, not just in space, to revenue. So final place in orbit as fast as possible. So like today's world, you are aggregating many satellites on an individual rocket, and Starship is going to amplify this as well because it's so big, you know, in order to fill it and get those cost economics that they advertise, you've got to fill the mass. Okay. So in that world, you've got to aggregate enough satellites on the ground to make it fill up, you know, the rocket.

That takes a couple months. And then you launch, they all get dropped off, and now they need to go from that drop-off location, the metaphorical train station, to their final location. And that also takes several months. So you're looking at a deployment phase or period of, you know, eight, nine months to get all those satellites from the time they leave the factory to the time when they're making revenue. that's a long time in a grand scheme of a three to five year useful life span. And it's also a lot of money if you look at that, you know, $500,000 per satellite per month over nine months and 100 satellites.

Right. So that's a very real money. How do you get that to be more efficient? And I would claim that part of the virtuous cycle that reusable rockets creates is you can do smaller batches directly to final orbit, cut nine months down to two months. and deploy your constellation in a much more efficient manner. Yeah, and maybe just as some background context, satellites in the past, maybe this wasn't as much of an issue

because they'd be in orbit for what, 10 years, 20 years, several decades, right? So that nine months was less significant versus, to your point, if the cycles are accelerating and you want to stay competitive and your satellite needs to be up in three years, your next one, then it really is cutting into, like, what, a third of its life cycle? that's pretty significant. Yeah, so there's that aspect to it, too. The other thing that really switch in the economics of space and launch is you mentioned

these assets going on orbit and being alive for 20 decades, literal decades, right? The other factor is those things are exquisite assets. They cost multiple billions of dollars to make a satellite, all right? In that world, the customer does not care what the launch cost is. It could cost $100 million, $200 million, $200 million, $300 million. dollars, they don't care because if the asset is $3 billion, the only thing they care about is that it gets from the ground to orbit safely. That's it. And that's the right thing to care about when your payload is $3 billion, right? But that is completely shifted for the reasons

we talked about earlier. Electronics are cheap and powerful. They're small, they're lightweight. Satellites are much, much cheaper now. And so you now have it inverted where the asset is you know, let's call it a million dollars, but the launch is $100 million. Now, all you care about is the cost of launch. So that has completely flipped in the last decade. That's such a great way to represent it. It's literally flipped between launch costs and then the cost of the actual payload. Who else is trying to get satellites up there?

Who else is using the information, the capability up there? Or in other words, who is paying to launch these things into orbit? There's a number of different types of telecom, but telecom is definitely a big one. You also have position, navigation, and timing is a big area. So as we go to this world of automated cars, as we look at automated agriculture, improving efficiency on agriculture, as we mentioned geopolitics, obviously position, navigation, and timing is very important for our U.S.-based joint forces, but also forces across allied countries. coordinating, communicating, being able to do positioning, missile detection, guided weapons,

all of these things take massive amount of coordination, and those comms all go through space. So that's another big area we can, instead of using, or at least to supplement the exquisite assets we have, you can now look at much lower cost and distributed assets and lower orbit to do those things. So that's called P&T, position navigation timing. We mentioned and touched on Earth observation. It's another huge one. There are the environmental elements that we talked about. There's also things, you know, like you can do agricultural futures through satellite-based imagery.

You can count cars and parking lots to understand how good the shopping season is. You can do all kinds of things of this nature that we can now, you know, supplement imagery with some AI and various algorithms. and you can do some really interesting, powerful things. I think that you'll see more and more as data goes to space, you're going to see more and more on-orbit compute become more important because it's relatively expensive and there's a physics-based choke point to get that data from orbit back to ground. And I think you're going to see more and more compute go on orbit

so that we can take massive amount of imagery and I as a user can go request whatever insight I want, and that compute is actually done on orbit and then only the final answer is shipped down. Fascinating. Things like that, right? So this is kind of like the cloud. The cloud starts to move on orbit.

The cloud is actually up in the clouds. That's so funny. So just as one quick follow up there, when you're talking about the different capabilities, who specifically is purchasing? Who are the purchasers? Are these universities? I assume governments part of the role there.

Who are the different entities? Could I, if I wanted to, you know, had enough money? Could I buy a satellite and ship it up there? Or what are we seeing in terms of who's actually doing that? Well, you could if you wanted and you had a use case. But I think what you're going to see more and you're already seeing is you as a person can go buy imagery. Let's say a hurricane comes, you got displaced and you don't have access back to your home yet. You can buy an image. I think you can do that today of your house, your specific location, a day, or two or whatever the lag is of your house location

after a hurricane that you can't get to. There's a number of different retail use cases like that. I think that you're gonna see, certainly the university governments, you're gonna see policy be informed. I think that's huge to use data to inform policy decisions, right? Especially as we think environmentally,

you know, what makes sense, what doesn't make sense. A lot of times we get locked in rhetoric that's not really anchored in data. And what this allows us to do is anchor in data. Hedge funds, another one that I kind of mentioned. You know, you can use imagery to do various different predictions, et cetera. Definitely. Let's talk about government specifically because, I mean,

I feel like the first space race was very, very government-related, government-funded. And we're now seeing, you could say, this next iteration of the space race, be more privatized. But at the same time, the government is likely a large buyer. And so what is the government looking for when they're participating in this economy? Well, we kind of touched on this before, and this is a great time to bring some more light to it. The historical world is we put up these massive and exquisite assets to specific locations, typically pretty high orbits, and they're very, very expensive and massive, and they're not made to move around.

This was okay for the last 30 years for U.S. and its allies, because we were really the only ones to have capability to put that kind of mass that high. that's no longer the case and what used to be you know again these exquisite assets sitting on their own performing their function those now have company they have company with ambiguous intent trailing them watching them and whatnot and we really have very little ability to move so general shah has been one of the more vocal people kind of talking about this dynamic in space and The analogy that he draws is these things are like RVs. If you were to buy an RV and go on vacation, but you only ever got one tank of gas, what would you do?

You would think really hard every single time you turned it on and moved it, right? And that's the way they have to think with these assets. And so what he's looking at and the entire DOD is starting to think about is how do you move from that world to a world where you can do kind of on-demand, dynamic space operations, right, where you can move to a new orbit on demand, or you can go to a new orbit on demand, where you can move from one orbit to the next on demand. And more and more, what's interesting and something that we're seeing a lot of use cases for, both commercially and from the government, is being able to take things from orbit and return them back to Earth.

So now, if you have kind of the mobility triangle complete, where you can go to orbit, from one orbit to the next, and then from orbit to Earth, now... you can deploy an asset more or less on demand to perform a function, it can be a high-value asset that maybe, you know, it wants to do something, but then you want to retract it and bring it back. You can now all of a sudden do that. We really don't have that capacity right now. One way to think about it is, you know, think about conflict on Earth, terrestrial conflict and the way we deal with those things, when things, when we have a brush up or some event, typically a country will deploy assets to a border or to a location so we can move aircraft carrier

into a location or we can deploy troops and we can do those things in a peaceful way we don't have to engage but there's a deterrent right and then we negotiate and then you can pull away that deterrent right we can't do that in space we don't have that ability again one of the unexpected byproducts of full reusability is unlocking that ability to deploy assets and then retract them. I know it's hard to make predictions, but how close are we to actually having that capability of bringing things back down?

Because let me know if I'm wrong. Right now, all the satellites that we're shipping up there, for the most part, continue in orbit and then eventually burn down through the atmosphere. Or is there another way that they currently come back down? That is the way that satellites come back down. There are perhaps other ways. The typical way to get something back down is through a capsule.

So we do do this. We go to the space station, for example. We deliver people or cargo or whatever, and then we bring things back down. And the way you bring things back down is with a capsule. Typically, those have relatively small amounts of maneuverability built into them, and it's a whole different type of an asset. And what we're proposing is you can do this with the deployment asset that has to come back anyway, right? So it's kind of a natural byproduct of your average, everyday mission.

But yeah, so capsules are the way we do it. That requires an additional system, a whole, you know, separate vehicle in order to do it. And what we want to do is take that away and just make it part of every single mission we ever fly. If we look ahead, what does this unlock? Could be, you know, drug discovery or, you know, a lot of people think of space tourism. But paint a picture of what you see and what gets you very excited. Well, what gets me excited is like the breadth of totally different things that can be unlocked. I think a good place to start would be to think about innovation itself.

What are the conditions that make rapid innovation possible? An example would be take your typical PhD students, about a five-year study window. What you would like to be able to do is for that student to do, let's say, three to five iterations on some technology or a thing that they're doing. And that's pretty typical for ground-based experimentation and development. but if you were to say hey typical PhD student with typical PhD funding can you do three to five experiments on orbit iterate three to five times and you know really develop a new sensor or a new alloy or a new whatever it is technology the answer is no like the average PhD student there's no way they can like maybe you'll get one experiment up and it'll be small because it's expensive and it takes that long and what we want to do is to be able to to get to down to low enough cost and high enough availability where that typical student can do three to five things. I think that's a kind of a good mindset. What does it unlock? We talked a lot about sensors, right? So one experimental sensor is another environmental kind of example, but think about plastics

and microplastics in the ocean. Where are they? And where do they come from? Well, there's a sensor. It's an experimental one going up to try to detect microplastics in oceans, detected from space. so we can see where they're consolidating, and then that's obviously the first step into going and cleaning them up. So that's one example. But you think about maybe a little bit longer term, there's certain technologies or applications where the combination, one or the other,

and then the combination of microgravity, so zero-g and pure vacuum of space are very helpful, right? One example would be alloy creation. Alloys on Earth get, you know, it's molten metal that then gets mixed up, right? And as it cools, there's buoyancy effects, there's cooling effects that are imperfect, and as a result, you get imperfect mixing and you get kind of what are called inclusions or imperfect crystal formation. In microgravity, those go away, and you can get perfect crystalline structures that's been demonstrated with alloys that won't mix on Earth but will winks

in space. And so you can get really cool. I think material science is, you know, ripe for disruption if you can get to and from space with relative ease. But that's obviously something where a lot of mass has to go up to Earth and then, or up to orbit and then come back down. Another one is biopharma. So biopharma, proteins, for example, grow very well in microgravity. There's a lot of use cases for zero G in, you know, biopharma space. The problem, though, historically has been twofold. And a lot of use cases, that biofarmament, pharma experiment will die in that process, right? Yeah, it makes sense. So you need to kind of lock it up, ship it metaphorically the next day, have it do its thing before it dies, and then in a lot of cases,

comes back, should come back in a nice soft landing. So if you're growing tissues, for example, you can't slam it with 20 Gs on the return, right? You can't let it get super hot, right? You have to, you know, think about keeping a mouse or a person alive through this process. So that's another one that, you know, just the conditions to do any experimentation at all are not there. There's a company that is trying to grow replacement retina on orbit, you know, so that's very interesting. Growing replacement organs, organ transplant on orbit is another one. Protein growth. So think about our meat supply, you know, it's a huge environmental impact and in the grand scheme of efficiency, not very good growing entire animals, right? Basically, that's what we're doing. So can you do that

efficiently in space. Okay, so that's kind of like the manufacturing side. Fiber optics is another classic example that can be drawn very long, perfect crystalline fiber optics on orbit and microgravity. It's hard to do on Earth. So manufacturing in space, I think if you give it enough time and if you solve a mobility problem, that's going to be a very big sector in ways that I don't think we can predict. Same as this goes back to our transcontinental shipping, right? Such a great example, though, truly, because that would have sounded as outlandish hundreds of years ago, right? Yeah, that's right. So there's that aspect. I think tourism is another big one. I think a lot of people do want to go to space. I would love to go to space if it's safe and it's interesting and

there's places to go. I think Starship is actually going to unlock that. So massive, massive structures in space, Starship absolutely unlocks that. To me, then, the question is, okay, let's say you have the space hotel. How does that get serviced? Is Starship the right thing to be servicing it on a weekly basis. I'm pretty sure, especially early, the clientele that can afford to go to space aren't going to love eating astronaut ice cream for a week on end, right? You might be surprised. All right, maybe at the beginning, but after a week, that's going to get old. Yeah. So how do you have a fresh and regular supply of goods and services to those stations? You're probably going to want weekly or multiple times per week supply of fresh food and

raw material supply, and then the down mass of finished products or waste. And I think those things are something that are smaller than what starship offers. By the way, tourism is another one. And I think if you're willing to think long enough, this is decades in the future. But I think, you know, mining and resource development, I think, is another one, whether that's on the moon or asteroids. There's actually a prospecting mission going up by NASA to go look at a high net worth asteroid, let's say. And I think, you know, if you're willing to think long term enough, then that becomes important. that maybe even dominates the rest of these in terms of the economic scope.

Right. And if you think about it, it is critical for us moving off planet as a species, right? Yeah. Yeah. I just love the term height net worth asteroid. I feel like that's, you know, I'll be monitoring that one on Google Trends. But no, that's the great picture that you painted and maybe just to ground us in, again, no predictions here. How soon are we looking at getting maybe this second stage running, where's Stoke at in that journey? Tell us a little bit more about maybe the nearer term trajectory. Well, I think this is the decade to figure that out. And I think, you know, we talked about the cost economics at 20x factor that's still out there to be had. I think

the first small number of companies to demonstrate those economics, those are the ones that win. And so, yeah, I think that happens this decade. And that's pretty exciting because, you know, it's 2023. And yeah, I think that's going to happen. where Stoke is in that journey is this is the lens that we've founded the company on. And I think that, first of all, you have to think about it from day one. It has to be engineered from the ground up in order for it to work at all. And so you have to understand what that second stage looks like. And so that's where we've focused our early time.

We have developed, I think, the biggest question marks we've had in terms of will this work and can we create a system that is robust and reasonable enough. I think those basic questions have now been answered. Yes, we've demonstrated a full-scale second-stage rocket engine and heat shield, which for us in our design is integrated as one. We've demonstrated that kind of full operational window on the ground. We've demonstrated it up to very close to what we expect the re-entry heat loads are going to be on the heat shield. We've demonstrated control authority of the engine, which is kind of done in a new and different way on our system. We've demonstrated really the whole end-to-end loop of really the technology basis, but also things like software and avionics and power systems and guidance navigation and control and that whole control loop of systems that has to be live and on board to make this thing work. We're moving out on the first stage. We're working very aggressively to put the system on orbit toward the end of 2025.

and then I think, you know, in fairness, probably multiple missions to figure out how to prove and figure out and make it efficient to make the whole reusable cycle fully tractable. Definitely. You know, you are one of the few people who not only believed that reusable rockets could work, but also decided to be the one to pursue that together with your company. And so given the ambition, the optimism you have. had, could you speak to any challenges that even surprised you coming in that you faced along the way where you're like, wow, you know, I still want to do this, but this is surprisingly hard.

Look, I think we've benefited a lot from being in the industry for a little while understanding and being able to think critically about what works and what doesn't work and being able to design a company that just iterates on all of those things. So you mentioned supply chains. we very firmly believe that vertical integration is extremely important, especially for the R&D phase. You have to control your dependencies and have the ability to iterate very quickly if you're going to move at a pace that you want to move at and do it for the cost that you predict, right? You can't outsource those dependencies to some supplier who may or may not care about your success, right? But in terms of unexpected challenge, I think, and this is maybe to the other founders out there, is fundraising. Even in a good fundraising cycle, you see these headlines go out, you know, whatever, X, Y, Z raises a gazillion dollars, and all you see is the headline.

You're like, oh, like, that got funded. How hard could that be? And it is not easy, right? And so that's something that I, as I founded, had no idea about it and have the network and have the understanding of how to do it. And it is a challenge, right? So maybe that's one of the biggest unexpected things. The rest of the stuff, we know it's hard. We can plan around it.

But that was the unknown. You mentioned other founders out there. And I think when you're this early to an industry, there are just endless opportunities that you spot along the way, but you have your hands tied as you're building this reusable rocket company. And so any opportunities, gaps, things that you're seeing, that you're like, you know what, if I could clone myself, and maybe, you know, maybe that's eventually on the horizon,

And I would attack this problem or this problem, or, you know, maybe Stoke would benefit from a founder attacking things that, you know, you can't pursue on your own. Anything come to some mind there? First of all, I think it's so empowering to take the founder view of the world, which I didn't always have. But with the founder view of the world, you start asking yourself questions, what are the important problems that need to be solved and how can I go and do this in a way that's a sustainable business? I will say one of the problems that I knew had to be solved. solved is, let's say, the idea of software for hardware purposes. The idea of organizing work and tracing part pedigree, part history from inception to deployment and then through operations

all the way to retirement. This is the idea of part pedigree. And it's something that has not been solved well by the industry. It's something that I knew had not been solved well by the industry. we, in fact, one of the reasons that we did why Combinator was to get a ground floor view of the different SaaS products being born. But we wound up making a decision to, hey, we need to build this software for ourselves. It's something that the same decision

that many hardware companies make. And if they don't, they're stuck with spreadsheets that are imperfect, never up to date, never coordinated, and they just try to deal with it imperfectly. And so we bought this on and after a very early discussion, it's something that we decided, hey, you know what,

like we need it. We know everybody else needs it. Let's build this in a way that is sellable and can be shared with everybody. So we built this product called Fusion by Stoke and it tries to connect those dots. And we just did a general release for that and something that we're finding a lot of traction with. So that's cool. It's also not your question. I think there's I think there's a word of possibility in space. But before we started the company, we were thinking about different world problems that need to be solved. And there's two of them that have stuck with me that I still think about. One of them is desalination. That problem is a big one. Well, I would say also clean energy, huge problem, but there's also a lot of money and effort going into that one. So that

one's maybe, you know, already being attacked. One question just to close us out is, you know, if we do get to this vision that you paint of us having fully reusable rockets, we have these turnaround cycles of days instead of months or even years, and you see this constant level of iteration, It sounds really exciting, but also something that comes up is just imagining the congestion up there, all of these satellites trying to maneuver. People may have heard of the Kessler syndrome. We actually got the chance to talk to privateer around a year ago and about what they're doing in terms of situational awareness. But it also feels, you know, I just spoke to how certain industries haven't caught up. It also feels like maybe the law, as it relates to space, hasn't caught up either to the speed that companies are now iterated.

how do we kind of set ourselves up for success so that the system that is growing so quickly operates in the way that we want it to? Yeah, this is a really good question. In many ways, it is the Wild West in space. There's regulation to get up there, but once you're up there, there's very little regulation, and even more so, there's almost no means to enforce whatever regulation there would be, right? And so, listen, I think the industry and the regulatory bodies need to move together, as always for a new industry.

I think the first step is, you know, think very critically about do no harm, right? So that's the first step that businesses should think about from the get-go. As an example, so do-no-harm would mean don't leave junk in space. Surprisingly, most of the conjunctions or collisions, as they're called conjunctions, most of those happen to be with dead second stages that are out floating around, believe it or not, from the earlier days. And the reason why those are more prevalent is the stages are huge.

They're massive things. And so just from a surface area perspective, they have a higher probability of hitting other things. So it's a little bit self-serving, but an obvious thing is don't dump your second stage on orbit in a dead orbit and have it sit up there for decades. You're starting to see some regulation. When you deploy a satellite, you know,

you used to have a de-orbit plan, you know, has to come out of orbit over 20 years. That number is now five years. Again, there's very limited way that you can enforce that, but that's now the guidance. So we talked about earlier, if you're deploying new constellations on a period of three to five years, is there like a pick a tree, plant a tree type model where you can deploy a new satellite and then bring the old ones down? Maybe so. Maybe you have to start thinking about that. So there's a lot of support industries that make sense and have to come online in order to make the rest of the economy work and flow as well.

Yeah, it feels like we're so early. It's interesting because I don't know if when you have been in the industry for a decade, you feel like, oh, this industry really started decades ago and it's been here for so long, or if you feel like we're just at the tipping point or at the very beginning, but I guess both can still be true. Yeah, I think a lot of these hard tech things, you even look at computers and things like that. There's decades of very early kind of proof of physics, let's say, that happens. And then something happens, whatever that is, and the flywell really starts going and you get that exponential growth. We've had those decades of kind of a marination period in our industry, the physics demonstrations. I don't even think we're like in the exponential growth phase yet. I think it's at the very beginning of that. And I think what needs to happen is the full reusability problem needs to be solved. And then that unlocks the real growth.

Here's another good historical example. Well, if you look at the trajectory of aircraft, commercial aircraft, in the 1930s and 40s, it was obviously very war-driven at that point, but what you had is a ton of different companies attacking this problem. Airplanes looked very different. You had triplanes, you had biplanes, you had the spruce goose, you had very weird aircraft being developed. And it wasn't until two inventions where the whole thing kind of consolidated.

And those two inventions were the jet engine and the pressurized cabin. That's what made commercial aircraft possible. And when that happened, you saw massive consolidation, and that's when really the aerospace prime started to really take shape and form into what they are today. I think that's where we are. We're in like the 1930s and 40s for space. We have a lot of different ideas that are being tested. And in my opinion, mastering the first stage reuse and the second stage reuse are the two ingredients

that are going to lead to mega consolidation and then also a healthy and thriving economy. Yeah. Well, I'm excited for it. And thank you for spending all this time with us and walking through this with us, but also for the work that you're doing, being one of the many companies who's trying to figure this out, trying to get us past the 1930s and 40s and get us into that heyday where we all can fly now today, relatively safe. You know, I was reflecting on the fact that we board airplanes without even batting an eye. People aren't thinking about, oh, you know, is this going to go down? They're just some people sleep on the plane. They watch movies. They're not even thinking about the fact. fact that this is like a marvel of engineering and hopefully we can get to the same spot with space. Absolutely. All right. Thank you so much. All right. Thank you. Appreciate it. If you like this episode, if you made it this far, help us grow the show. Share with a friend or if you're feeling really ambitious, you can leave us a review at rate thispodcast.com slash A16c. You know, candidly producing a podcast can sometimes feel like you're just talking into a void. And so if you did like this episode, if you liked any of our episodes, please let us

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