Closing Bell - Manifest Space: Ursa Major CEO Change with Outgoing CEO Joe Laurienti and Incoming CEO Dan Jablonksy 8/1/24

Episode Date: August 1, 2024

Ursa Major is having a change of the guard. Founder Joe Laurienti is passing the CEO title onto former Maxar CEO Dan Jablonsky. With the change to take effect next week, Morgan Brennan sits down with Laurienti and Jablonsky to layout the transition, the propulsion startup's gameplan going forward, and what it all means for growth.

Ursa Major, a space and defense startup known to manifest space listeners, announced a major change today. Nine years after starting the propulsion company, founder Joe Lorienti is passing the CEO torch. And Dan Jablonski, the former chief executive of Maxar Technologies, is taking it. Joe and I have gotten to know each other over several years now. We've been in sort of the same orbit of the space community. And as we transitioned into the going private transaction with Maxar, Joe and I started spending a bit more time together. And I've gotten to go up to the facility and see some of the great work they're doing up there. And it's just a fantastic opportunity for the company, I think, at the growth stage that they're at and where they're

headed with the industrialization of what they're doing with rocket motors, both liquids and solids. Jablonski, who ran Maxar through its acquisition by private equity firm Advent International, will start at IHRSA next week. The game plan? Begin scaling production of the rocket engines, hypersonic propulsion systems, and solid rocket motors that IHRSA Major is developing for customers. Customers that range from commercial space startups to defense primes and the U.S. government. On this episode, Jablonski and Lorienti join me together

to discuss the leadership transition and what it portends for the business of rocketry. I'm Morgan Brennan and this is Manifest Space. Joining me now, Joe Lorienti, the founder of Ursa Major and outgoing CEO now, and Dan Jablonski, the incoming CEO of Ursa Major and an industry veteran. It's great to have you both here. Thanks for taking the time. Thanks, Morgan. Great to be with you. All right.

Thank you. So you've just made some big news. Ursa Major, a company I've been following for a little while now. Joe, you you built this company up. Why is now the time to step away from the CEO role? We saw a really unique opportunity in which we were not out to market fundraising. We had just landed some pretty exciting contracts and the company was just really positioned for growth. So I've been pretty lucky. I've gotten to wear two hats as founder and CEO. And we brought in a few other really

capable leaders. We brought in a chief financial officer this year, a chief growth officer. And having known Dan for a bit, it felt like the right window of opportunity. Awesome. Dan, you've been doing this for a while. You and I got to know each other when you were at Maxar and then took that company through the private process as it was bought by Advent. Why is Earth's Major the next chapter for you? So Joe and I have gotten to know each other over several years now. We've been in sort of the same orbit of the space community. And as we transitioned into the going private transaction with maxar joe and i started spending a bit more time together and i've gotten to go up to the facility and see some of the great work they're doing up there and it's just a fantastic opportunity for the company i think at the growth stage that they're at and where they're headed

with the industrialization of what they're doing with rocket motors both liquids and solids and uh very strong colorado companies so for me it's just a you know sort of an ideal time ideal opportunity um and a great chance to work with a great team and a great set of customers now you start in the next couple of days on monday august 5th what what does day one look like uh listening spending an awful lot of time listening uh introducing myself to many of the customers whom i know, getting to know the employees, diving deep into technology, doing some whirlwind tours with Joe. We've got the luxury of spending a lot of time together and just looking really forward to getting started on that and hitting the ground running. So Joe, what does this mean now in terms of your involvement in the company

and the role you will play? Like I said, I've gotten to wear two hats over the years of founder and CEO. In the CEO role, you're running a business, you're really responsible for the board, the employees, the financials of the business. As founder, you're kind of just tasked with doing whatever is required to make the company survive. And I look forward to spending time there really focused on how do we grow? How do we thrive. So first few months are just getting Dan through kind of a seamless transition. It's going to stakeholders, going to customers, going to government partners, and explaining this next wave of Ursa Major. What does the vision of the future look like? So Dan, rocket engines, solid rocket motors, hypersonics,

how do you scale production of all of these new technologies, new capabilities, 3D printed? So I think the first thing, you know, to start with the Ursa Major story is it's great technology. They've been using cutting edge techniques for the development and also the production of the products. And so, you know, what we're going to do is double down on that technology. We've just announced the R&D facility in Youngstown, Ohio, scaling that up, and then moving into the phase of not just R&D, but winning the big contracts, and then building up more and more facilities and the capital footprint that will allow this to become, you know, one of America's great suppliers of rocket engines, both liquids and solid rocket motors. Joe, when you talk about the focus on growth long-term, how do you think about that?

I think Dan really said it well. A lot of what we've got ahead of us is facilitization. It's building the capability to build more and more engines and motors. But I think a really important piece of this and part of what really excited me about Dan coming on is establishing more of a trusted foothold with our partners, be that government partners or industry primes. Rocket engines and rocket motors aren't easy. And you've got to establish yourself as a really reliable supplier or a really trusted supplier. So that's what the next few years look like. I've been having so many conversations about rocket motors, the need for a more resilient supply chain, the need for more competition

in the market. Dan, just want to get your thoughts on how the competitive landscape evolves and the role that IHRSA plays in that? Well, I think what the current war in Ukraine has demonstrated as well as we've read some GAO reports about hypersonics and the imperative of the strategic components of the space race as well, that the US just does not have the standing it needs to for the industrialization of this, as well as the rapid technology advances. We're seeing some lagging against China and Russia in those areas. And so I think this is a really unique time for a young company like Ursa Major that has developed some phenomenal technology to have some breakthroughs. There are certainly some great companies out there that do this sort of

work. There are some other startups that have been doing this. But as I've looked across the landscape, I think Ursa major provides really unique competitive competitive advantages in technology and a really excited team to go tackle these problems and so you know we're looking forward to building it out in the us uh with you know proud um ownership there and uh just taking it taking it for the ride it seems like we have commercial space and space launch there's hypersonics and then there's solid rocket motors, which tend to be more tied to missiles and the like. How do each of those grow

and what do those synergies look like? I think the first thing, and Joe and I have spoken about this quite a bit, is that you start with really advanced design and technology platforms and a process by which you can rapidly innovate and test things out, fail fast, and then move into production and then continue to make upgrades to the technology as you're moving through the process. So VersaMajor really has that in their DNA. And so as you think about each of those solids, rocket motors,

hypersonics, and commercial space, you kind of start with a foundation, a way of doing business, a way of meeting customer objectives, and a way of moving through engineering challenges. And URSA majors, you know, demonstrated a great ability to do it on all fronts. Each of those different markets has its own challenges, right? And its own opportunities. The U.S. Department of Defense is the largest market in the world for this type of capability. And I think there's a great entree point that that person major has there for solid rocket motors and hypersonics. We're just we're just behind on all fronts there as the U.S. So I think there's a great way to break through the DOD there.

And commercial space has had some ups and downs, but I think over the long cycle, over the very long horizon, that's a phenomenal growth opportunity. And URSA Major's got some great capabilities there. At your time at Maxar, I mean, you did a lot of now and is now in a position to run multiple companies. How has the ability to work with the U.S. government and the military, how has that changed or evolved? Does it need to move more quickly? Well, you know, we always wish it would move more quickly. There's a different cycle between a startup company and the way that the DoD and the intelligence communities have historically done business. but there's really good and valid reasons for that they're in charge of the nation's defense and uh the intelligence community is is responsible for protecting the us and our security

around the world they've developed well and thought out thoughtful processes for how they do that they're also doing some really cutting edge um you know contracting sda and the team there has just been fantastic about moving really rapid technologies into trial phases quickly to try stuff out. And I think Ursa Major will both be able to do the legacy missions as well as the forward moving missions also. I think another opportunity we have is the international business for expansion and growth. And I think that that helps offset some of the ups and downs in the U.S. budgeting and procurement cycle as well.

OK. I am just curious about what you think now of this space industry, this defense tech industry as it in of itself has evolved. Well, I mean, I think, again, over the long arc, and there will be some, you know, some ups and downs as we get there. But over the long arc, this is an amazing strategic opportunity for the US, for the commercialization space, and for bringing on all types of new technologies, including hypersonics. And, you know, it's a really exciting place to be. The capital formation has been been, you know, you know, sort of really fantastic. And then it's also had a few setbacks with some of the D specs and some of what the companies did there. But that's that's capitalism, that's markets. And that's the way the markets are

efficient and supposed to work. So if we develop, you know, develop and build and deliver great products for our customers, take care of our teammates, and the financial returns for our investors should be great along the way. And Joe, when I hear, you know, hirings for CFO, Chief Growth Officer, the fact that Dan's coming on now as a CEO, how does it speak to the way you're thinking about the future of Ursa Major? Is an IPO a possibility or is that still too far away for you to be considering? I wouldn't rule anything out, but I think the important piece here is exactly as Dan said, this is a long tail market. This is developing a rocket engine or a rocket motor system requires a lot of rigor and a lot of time. So we wanted to put the foundation in place,

you know, really the technology and the traction we've made over the last eight, nine years. And then on top of that, you bring in some really capable leaders. It's just really exciting to see the inflection that's in front of us. Do we know how big this market is going to be? I think we have some ideas. To Dan's point, the commercial space side, you see any number of analysts, banks will put out different analyses for the Cislunar market, the commercial LEO market, the space-based data market. But I think the way we've looked at internally our three product segments is they are all really important. And as we see these markets grow, we know that if we have the right technology, the right approach, we've got a really important foothold and a really important marketplace. So we focus more on that than the kind of size and growth of the markets. Like Dan

said, they go up and down over the years. I do want to go back to the manufacturing piece of this, Dan. And that is when you're talking about new technologies, new capabilities, and some newer ways to actually produce them, what does that mean in terms of how you build out that manufacturing footprint? Well, I think it's different depending on which type of technology and which part of the value chain you occupy. Earlier in my career, I had some time at Flextronics, now Flex, and I got to watch out how they built that out over a worldwide electronic supply chain model. And so I think that as we work with an up-and-coming company like Ursa Major,

we're going to adopt some of those techniques. But at the same time, it's aerospace and the margins for failure are very small. So we're also going to use a lot of the techniques that have been developed at Ursa Major and other large defense companies in the U.S. government to make sure that we're 100% solid for everything we're delivering and into that ecosystem and that supply chain. And finally, I just want to get both of your thoughts on leadership and what it actually looks like from a human standpoint and also from a cultural standpoint to hand the mantle over, Joe, as the CEO and as the founder to Dan and what that transition looks like and how you convey it not only to your investor base and your customer base, but to your employee base.

I think all I've been conveying is excitement, not just because I've gotten to know Dan and I know what he's capable of, but again, the timing of the business, where we are at, the fact that we kind of have this rare opportunity for the two of us to go together to our stakeholders, be it employees or government partners or prime partners. But it's just everything from the transition itself to the timing and how we're going about this is really, really exciting. Yeah. And Dan, just in terms of your vast experience, what does that bring to the table? What are the lessons learned? And how does that position you to continue to, I guess, put your own footprint or your own fingerprints on this while maintaining that founding ethos i i guess i i come in with a few scars um in a you know some track record and some history of the space industry um but i think

that's a good thing um i think you know as i've gotten to know joe and the team up at bursa major and have spent some time with them one of the things that really excites me is just the culture the level of integrity, the level of passion about the innovation. And those are all things that we had in I saw at Maxar, which is just going forward with all of those things on all fronts. And I'm really excited to join the team there and to bring what I can to the table. And it's like all these things, it's a really big team effort and they've put together a fantastic group of folks, and I'm looking forward to working with them. All right. Well, we're looking forward to covering it here at CNBC. So Dan Jablonski and Joe Lorienti, thank you for joining me.

Marissa Major. Thanks very much, Morgan. Thanks, Morgan. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.