Main Engine Cut Off - T+295: The Economics of Space (with Matthew Weinzierl and Brendan Rosseau)

Episode Date: February 19, 2025

Matthew Weinzierl and Brendan Rosseau join me to talk about their new book, Space to Grow: Unlocking the Final Economic Frontier. We talk about the economics driving the space industry today, how traditional economic theories apply—or not!—to the industry, and how to use economics as a lens to shape your business and policy approach to the future.This episode of Main Engine Cut Off is brought to you by 31 executive producers—Josh from Impulse, Russell, Joakim (Jo-Kim), Ryan, Lee, Fred, Pat from KC, Steve, David, Stealth Julian, Joel, Jan, Frank, Matt, Bob, Pat, Better Every Day Studios, Joonas, Donald, Warren, Theo and Violet, Kris, Tim Dodd (the Everyday Astronaut!), The Astrogators at SEE, Will and Lars from Agile, and four anonymous—and hundreds of supporters.TopicsSpace to Grow: Unlocking the Final Economic Frontier: Weinzierl, Matthew, Rosseau, Brendan: 9781647827168: Amazon.com: BooksEconomics of Space | Economics of SpaceThe ShowLike the show? Support the show on Patreon or Substack!Email your thoughts, comments, and questions to [e-mail] @WeHaveMECOFollow @[e-mail] on MastodonListen to MECO HeadlinesListen to Off-NominalJoin the Off-Nominal DiscordSubscribe on Apple Podcasts, Overcast, Pocket Casts, Spotify, Google Play, Stitcher, TuneIn or elsewhereSubscribe to the Main Engine Cut Off NewsletterArtwork photo by Blue OriginWork with me and my design and development agency: Pine Works

Hello and welcome to Managing Cutoff. I am Anthony Colangelo. Today we've got a couple of guests with us. We've got Matthew Weinzerl and Brendan Rousseau who wrote a book together, Space to Grow, Unlocking the Final Economic Frontier. I'm holding it in my hands, got a chance to read it, and I've really enjoyed talking with them about the economics of space overall they had a lot of infusing of economics theory on top of the space industry and the recent history even some of the longer history of the space industry. And that helps explain the way that some of these sectors of the market are

working the way that certain companies in the market are working. I thought it's an awesome conversation with a great duo. So let's get into it. Matthew, wine's Earl, as we talked about, I know a different wine's Earl. So I've got that down and Brendan, her soul as Jake would throw the French on. I don't know. Thanks so much for doing this. I mentioned before we started to Matt that I believe I've either missed or not responded to an email from you when you were like in the early stage of this project and I'm glad to now have or maybe some of the projects that came before that led to the eventual book that we're talking about here. So I'm glad to have you both on the show. Thanks for hanging out with me for a couple minutes. Okay, we are super thrilled

to be here, Anthony. We're both huge fans of the pod and it's just honestly really awesome to be a part of it. So thanks for inviting us. Yeah, it's fun to be here. Matt and I, I can't tell you how many times we've traded emails of like, hey, did you hear that last Miko? Or like, oh, the last off nominal guest was great. And so it's kind of weird to be like, your favorite podcast comes to life. You're in it.

You did the thing. Yeah. All right. So I want to hear two things. I want to hear, maybe Matt, you can give us the rundown on the book, the elevator pitch for the book, and then Brendan, if you will, enlighten us as to the origin story. I'd love to hear those two to set the scene for what we're talking about. Yeah, sure.

Thanks. So the book is called Space to Grow, Unlocking the Final Economic Frontier, and its official release date is February 25th. So we're really excited to be talking both to Anthony and especially the podcast audience about it. The basic take is this, so I mean a lot of especially a lot of listeners to MECO are people who contribute to our knowledge in the space sector and Brendan and I have tried to like take on all of that including through MECO and off nominal and other great podcasts and books and articles

and everything. The one thing that we felt as we were researching this and trying to write about space and then teach about space. So I'm a professor at Harvard Business School. I teach a course on the business and economics of space that Brendan co-developed with me when he was working at HBS. As we were building all that up, the one thing we just didn't see was an economist's take basically on what's happening in space. And a natural question would be like, who cares? Why do I want an economist's take

on what's happening in space? But we tend to think that the biggest thing that's happened in the past 25 years is the introduction of market forces into space in a way that they weren't there before. And so once you start mixing the market and government, that's like home turf for economists. And so we're both enthusiasts about the potential for space. We thought, how can we contribute to this? And we thought maybe our skill set as people who think like economists would help. And so that's the idea of the book. Is an economist take using some of the classic tools of economics to unpack what's happening

in the sector, put the pieces together for people in a different way, and hopefully help it move forward faster. And so I think the next question was the origin story. So Matt, you can fill in some of the beginning of the origin story. I think the way I've heard you tell it before is that you're an economist, especially focused on tax theory and the relationship between governments and the private sector. It makes me sound really boring, Brendan. Tax theory, you can't mention tax theory, just don't even go there.

Hey listen, 25, baby. That's like a hot topic, you know? Yeah, listen, tax day's coming up, Matt. You think I'm here for the space stuff. I'm just here in case I have any IRS questions to ask you. But no, so with that focus that you've had on the government and the private sector and the kind of ideal relationship between the two. As you were getting into that you saw kind

of like mid-2010 SpaceX becoming a thing, introduction of market forces. I think that's when you started writing the first case studies on space, starting with Blue Origin and a few others. I know we first connected around then. I was then in college studying astrophysics and economics trying to understand like the economics of space. It wasn't really a thing. It was equally confusing to my college's astronomy department and economics department. When I said I wanted to do a senior thesis that combined both, they were like, we've never met these professors before and had no idea that this department existed.

Anyway, so Matt and I first connected around then, talking about the economics of space and then kind of what our separate ways for a few years. And then after you taught the first version of the space class at HBS, Matt, I think we connected and built up a class, did a bunch of deep dives and research and case studies on some of the companies and topics that we thought were most interesting and most revealing

about what's changing in space and why it matters. And then at the end of that, I don't know about you, Matt, but I felt like the student reception was really good and the guests that we had coming in, really awesome guests. When they were exposed to the framework and this lens of economics to think about some of these issues, I think a lot of them were like, this is really cool. This is a great way of approaching these issues. Like Matt said, we so wish that we had a book to give someone, just be like, hey, here's our thoughts in some organized fashion on what's going on in space. And so we we did the thing.

We put it together and it'll be released in a week. Our our universes were not entirely separated 10 or 15 years ago. I just realized I should mention this. I probably around when you started getting your spidey senses up about space, Matt, I was working at a web agency called Happy Cog that built the HBS site back in the day. No kidding. I actually worked on that website way back when. So we had like a near-miss connection there, I guess.

That's amazing. I still work, and now I run a little agency called Pineworks. I still work with some of the people that were at Happy Cog back in the day working on that site. So we're still in the cinematic universe together. Our paths keep crossing. Yeah, exactly. We just keep barely missing each other.

So the format of the book I found interesting because it's, all the other books that I talk about on the show, I feel like I have to like, if my friends or family ask about it, I have to like kind of suss out like, are they even going to be into this book, pass like five pages in because it's like the Eric Berger books, right? Like you got to be like ready for some nerdy details about valves and pressurization and like wild Elon stories. Like there's a type of person that's ready for that kind of stuff. You know, Laurie Garver's book, somebody that's going to be interested in space policy. Yours is a book that each section is a story of a company or of a portion of

the industry to get someone up to speed on what they need to know about why these kind of economic situations are occurring in these different sectors. So it's a book that works like both ways, right? Like someone like me can kind of go to the tail end of the chapter and be like, I know this kind of backstory stuff,

but here's the economist take on it. And I'm glad that you didn't leave out the first half because I can just hand this to somebody and be like, catch up with why I'm into space these days. So I don't know if that's, when you're thinking about the audience, was that knowing the kind of academic circles that you run in, Matt, or now that you're going off

into different industry areas, Brendan, were there people that you had in mind that you wanted to include a lot of that context, and do you find that was an important aspect to get maybe to other economists? I don't know, who is that person in mind that you wanted to include a lot of that context? And do you find that was like an important aspect to get maybe to other economists? I don't know, like who is that person in mind that you have? That's awesome. Thank you so much, Ailey, for describing it that way. I mean, that's how you describe it exactly what we hope, right? Is that, you know, it can speak to all the way from experts to absolute novices in the sector and kind of grab them each at

different in different ways. And part of that, to be honest, comes from teaching about it at a business school where we know that in the room, there are people who've worked at SpaceX and Blue and Rocket and all of these other companies, but then there's also people who are just finance folks or consultants who've never really thought about space and yet they're kind of intrigued and they want to learn more.

So we wrote the case studies, which eventually turned into the chapters of the book, exactly for that kind of broad audience. And I think to your question about like, how do we hope it lands with people, we hope that experts like you and others in the industry do find nuggets of insight that they wouldn't find in other books. And it's been like, honestly, the single most rewarding thing when we hear people like you say, oh, I read your book.

And then actually that stuck in my mind. And like a few weeks later, I brought that up to somebody in context. Like that's a huge, right? But in many ways, the audience that Brendan and I are most focused on is what we think of as sort of the next ring of business people and individuals and organizations who, they've heard about space,

but they haven't really devoted time to thinking how they might actually create value in it. And so it's a call to action for those people to pay attention to what's happening. How did you two, I don't know if I've ever interviewed a dual author book before. I'm just kind of curious. Did you divide up the work in a certain way? Were there things that one of you was focused on or certain companies that you wrote about? How do you split that up? Yeah, well, Brendan already outed me as a tax theorist.

I wrote the boring, dry econ parts of it, and then Brendan figured out a way to make it actually readable. I mean, that's only a slight overstatement. I was actually joking with a friend last night that we did a little event last night at HBS to kind of launch the book and Whenever Brendan gets the mic Sometimes this like beautiful string of inspiration comes out And that happened sometimes with the book to we'd be trading word files back and forth and he would just send something I'd start

You know tearing up while I read it and so so there was definitely a part of that going on Yeah, it was it's funny You were talking about that I was talking with a friend last night who came to the event and said so how did that work writing a book with two People was that awkward or was it hard and I kind of shrugged I was like actually I feel like it worked really really well because we have different like lived experiences and different sets of expertise You're a PhD economist who's been teaching about the role of governments and markets for at HBS for years and years now and I'm someone who's sort of like lived a little bit in the in the space industry. I spent

the first like six years of my career at Space Systems Command. So working on national security stuff kind of like in the trenches of space systems acquisition and spent some time on the Hill and was kind of just asking a bunch of these questions now at Blue Origin. So it felt like a combination of like theory and practice that was a really great the end up being a really great partnership. I felt. And then once we stopped recording, I could tell you about how annoying it was. That's for that's correct. I felt and then once we stopped recording I could tell you about how annoying it was The Instances in the book where you're you know kind of dissecting

You're applying these, you know classical economics theory kind of ideas two different and very specific use cases in the space industry There's a lot of them that that track really well, right? Like there's a lot of spline demand talk, there's talk of some subsidies and how that affects where the space station chapter is probably the one that is most about that of like, can you actually incentivize a market to exist and then let it actually last on its own? The section about planet is really interesting because, and you mentioned this a second ago, Matt, that it's an area where you can see, everyone can see the value of the thing right now, Matt, that it's an area where you can see, everyone can see the value of the thing right now, but not that many people can figure out how to use it yet. And so Planet has always felt a really interesting case because it's so evident to us

nerds. And yet, you know, you can't quite like, okay, but why should this person subscribe to Planet Data is really tough to turn the corner on. But when you run your clock from like here to forever, you know that at some point is viable. And it might be a case to contrast with something like asteroid mining where, you know, it is going to be viable someday. But there seems to be a pretty big gap between here and there. Maybe it's short now Astrophorge will yell at me when they come back on the show. But a pretty big gap between here and there. Maybe it's shortened now. Astrophorge will yell at me when they come back on the show. But Planet is much, the timeline is condensed that like the amount of capital they have to put into actually exist is doable and they've done it. Whereas, you know, AstroMining, we've seen tons of companies come and go because

it's just so expensive to even get to that standard operating. So maybe is Planet just in a really weird spot and a really strange case in your book that they can achieve what they want, but they are not yet turning the corner on, and maybe they are now, and their stock price is doing better lately. But that just felt like the quintessential example to me that you guys explained in a way

that I haven't really seen anyone attempt to. But maybe I'm just a planet nerd. I don't know. No, I think that, no, that was one of our favorite ones to write as well. And I think because exactly to your point that it feels like there's so much potential there. And when you actually talk to the folks at Planet, they see it and they're trying to

build this demand. They've got the technology, they've got what economists would call it the supply side. And now they just need to and they've got some demand, right? I mean, they've got a lot of customers across a wide range of use cases, but we all think have this feeling like there's a much bigger pie out there that's possible. And here's just one thought that when people ask us kind of what's a big takeaway we hope people will have from the book that relates exactly to this question, which is I think one of the big transitions we're going to all be making in the space sector relative to where we were before is when it was a sort of a government run centrally controlled sector, we kind of

knew the plan, right? It was like, here's our 10-year plan, our 20-year plan, here's where we're going to head. Once you get market forces involved, part of the beauty of the market is that ideas come from everywhere, you know, stuff that crazy ideas people have way over there. It turns out actually, yeah, that was a great idea that we wouldn't have thought of, but the market rewards it automatically. And I think I have a lot of optimism that if we can just get people deep in their own lines of business to start thinking, how might I use Earth observation or other geospatial intelligence data, they will come up with ways to use it that we couldn't think of from the center

that planet can't really even think of and that that's a way to unlock a lot of value. Yeah, the planet story for me is a great example of like what I think this era, this current era in space flight is all about, which is experimentation, where we're going to finally have the opportunity to have all

sorts of different companies pop up and try out things in orbit whether it's satellite communications or Earth observation. Earth observation is one that I feel like exactly to your point earlier it's like how could this not be valuable in the long run? It's like the ability to capture I think Ashley Vance put it this way in his book the ability to capture the sum total of human activity more or less in real time and as processing power improves to process, you know, to get out the finer and finer details of what's going on and when and why. That's something that's got to be valuable.

And I think if it was a different era in which, let's say it was like a Copernicus satellite or a Landsat where it was a government system and if the results were not that impressive or not that useful for normal people, we could spend a lot of time kind of arguing about, oh, was it the wrong design or did we do it the wrong way? And one of the benefits about this moment of experimentation and market forces is that, you know, other companies can and have popped up saying, you know what, planet, you're great, but I think actually we should do hyperspectral or we should be doing SAR or we should be doing more satellites, higher satellites, lower satellites, all kinds of other things. So like the good ideas, it's kind of a beautiful thing when you see it in action, which is these good ideas kind of organically arise, can be tried out and hopefully they're allowed

to succeed and like create value for everyone. So it's just, it's super exciting for me. There's something funny about the space industry that maybe it is because the barrier of entry is so high that the space industry thought process is that there's only going to be one or two competitors in each market. And then you look on earth and you're like,

do we need more t-shirt brands? And it's like, I don't know, probably everyone likes their different thread counts and different fits and different lengths and different sizes. And, you know, do we need more TV shows? I don't know, man, there's like 4,000 TV channels on, you know, any of these over the top services right now, and they seem to, you know, some of them die. Some of them do all right. The abundance of like earth based industry, um, is shockingly different

than the way that we approach space where it's like well planet works so spiral or black sky or. When i think you guys have this very optimistic take in the book of like. You're looking at the early phase here you're not seeing you know you're comparing to all the industries we have on earth that are mid swing or late cycle. Where the abundance is just insane. But I think people like in our era right now get trapped in that thought. And do you think that that shifts as the barrier to entry comes down? Like whether that is launch costs, component costs, or just a sheer number of people working on this stuff goes up? Like, what, what is it about space that we're stuck in this thinking? That's such a great question. I think, you know, a couple thoughts on that.

One is that, as when the like you said barriers to entry, when the sort of fixed costs of doing stuff in space are high, then you're naturally just as a matter of sort of economics, you're naturally going to be led into lots of concentration, right? It's natural for that to happen. Economists sometimes call those natural monopolies. And so that phrase indicates exactly what you're worried about. And then I think related to that, but somewhat different is that we were coming out of an era where often actually for political reasons, there was just like a ton of fragmentation of the supply chain for space, right? Like we wanted jobs in every state or every congressional district. And you had these very exquisite pieces being built by one shop, et cetera.

And so income SpaceX, for instance, right? And it can get the capital to overcome some of those fixed costs. And then it's like, this is nuts. Let's vertically integrate in a way that hadn't really been done before. And there's a huge amount of value in that big swing. And so the pendulum swings way to that side. Every startup thinks, okay, I got to virtually, I got to vertically integrate, I got to,

and I think one thing we've been seeing is that the pendulum can now start to come back a little bit where some of the specialization that's actually really valuable can be profitable again. And so to your point, like now exactly in Earth Observation, people can start to challenge the idea that there's only gonna be one and come up with their own niches. And I think we'll see that in lots of other places, including like launch, right?

I mean, not 130 launch companies, but probably also not to finding a way to make a business. Yeah, I think what you tapped into is one of the key messages of what we try to get across in the book, which is that we think of space as just like a place. It's just a place kind of like every other place on earth where humans have activities, where they try to create value, where the private sector plays a role, the government plays a role. You can deploy certain technologies to create value. That's, I think, kind of the description of how we would describe space. And the more that we continue to develop it, the more that we're allowed to experiment and costs keep coming down, I think it's natural that it may start to look more and more like a kind of normal industry. We won't think of like space as something different or like a space

economy or something like that. It's just, yeah, it's like kind of part of what we do. And it's, it feels kind of familiar in a lot of ways. The key for me is that I don't think we can expect just like the continued momentum of the industry without further intervention by entrepreneurs and other people just like that it's going to happen on its own. I think that the space industry, especially because there's so many fixed costs and it's still very, very technically complicated. There's all these traps that could prevent the continual rising tide to get us where we want to go. So if there's one other message that people take from the book, it's that we need more people considering themselves like space people, more people in the industry, more people as customers. We just want a bigger tent

of space activity and I think that's one of the reasons why we wrote the book. I felt subtweeted by at least one page in this book where you're talking about people that are looking at the outlier status of SpaceX and are concerned about the difference between them and everyone else in the industry being so great that it is going to create hard times in the near to medium term, right? And you guys probably know I'm one of those people that I'm like, wow, and I probably have described more to the thing that you describe of like, not all monopolies are by definition bad. Some exist because they are offering the best price or the best service or the best schedule or all the things that are pretty evident in the SpaceX example. They are the leader in the industry because they've done a really good job and they've

offered really good prices and they are the most competitive and they've earned that by sheer force of will and execution. But their lead is so great that it does look like it's going to hamper all but the Bezos's and the OneWebs of the world who actually can get up to their capital expenditure level or just kind of meet their playing ground because they have the resources to tap into. Should I be as concerned about this? Is this something that we've seen elsewhere in history and we've survived or is this unique because again, like you said, the barrier entry is high.

Because we don't have that many competitors right now, is this different than we've seen in the past. Yeah it's a super important question and i mean also i'll just say like for folks who are thinking about you know what kind of book is this we are as probably everyone on the podcast enthusiast about space but we really do also try to bring a realism to it because I think it's important, right, to especially from an economist's view to write a book that seems sober to folks and especially with risks like the one you're just pointing out, Anthony, which is for sure a risk. I mean, concentration is one of the ways Brendan was talking like progress isn't guaranteed. There's a couple of big threats out there, at least I think that we see. One of them is kind of giving up on this mix of government and markets. Like you could easily imagine people getting disenchanted if like the clips contracts just don't work very well over time, thinking like, oh, screw this, let's go back to the way we used to do it.

We think that would be a big loss. Similarly with SpaceX, like we think they've generally been much more creators of value than capturers of value, but at any point a monopolist can turn on a dime and become the other one and that that would be cost really costly for everybody. So those are certainly risks. I think economists... That's that's costly but isn't that a huge opportunity? Like that's how SpaceX became the way they are. That's just circle of life stuff to me. I'm also not a PhD economist on this call. No, no, no. Exactly. It doesn't feel like the circle of life. Well, right. Like what's the... Exactly Exactly. I mean, it doesn't feel like the circle of life. Well, right. Like, what's the exactly? So I mean, I guess the heart of the question there is, what is SpaceX really trying to do?

Like, are they trying to maximize the value of the company in the short run? Or do they think that actually the much larger value is created if they create a huge space sector? Right. Like if they are the seed and the foundation of something so much bigger, even than what we see today. And it seems to us like they're still in that camp, which is good for everybody. But again, they could turn and, and I guess as an economist, the only last thing I'll say, and then Brendan, what you get into too is, you know, economists tend to be a little less concerned sometimes about the ones that seem to be so

unreachable technologically. I mean, Google is just the latest example where all of a sudden something comes up that surprises us and challenges someone who seemed unchallengeable. So Yeah, I guess this is things Brendan yeah, I mean I Loved your I think it was your last episode Anthony where you're talking about kind of the the Elon of it all I'll just say I said I was talking about you on one time on this podcast. There we go I'm a big fan of new Glenn. I'm rooting for it very hard, harder every day.

So I'm glad that we're as busy as we are because it's just a good healthy thing to have real competition. It's good for the United States. It's good for the world. It's good for Blue Origin, certainly where I work now. I think it's good for the United States. It's good for the world. It's good for Blue Origin, certainly, where I work now. I think it's good for SpaceX. It's the healthy dynamic for everyone to not have single point failures like that. There's a bunch of examples in your book where traditional economic thinking matches really

well to the space industry. Were there any areas that you started looking into and were like, oh, that doesn't match at all. This thing that's happening in space is completely unlike all these other things that have come before. I'll start with one that I struggle with. So I think what we try to do, for folks who haven't read the book,

is I think we try to use the lessons of economics and the tools of economics to frame problems in ways that clarify what is really going on here, what the big questions are. I think for the discovery of specific applications and business cases, this is not the, here's how you get rich in space book. Like here's the best idea to do an orbit that no one's thought of and like just buy our book and you'll get rich. So one question that I think we maybe do a decent job

of framing, but I still can't like in my own mind settle is the commercial space station one. I have talked to so many people, we wrote the case study together on it and have continued to talk to pretty much everyone who's working on commercial space stations. And sometimes I talk to them and I'm like, man, we are, it feels like we're close to something big

on making like habitable space in orbit useful. And then other times I'm like, you look at the history of it as we talk about in the book and it's like, oh man, it's just gut punch after gut punch after you read these reports from like the 80s saying, the demand from the pharmaceutical industry for commercial space is gonna be like $30 billion by the 90s.

Like, oh my God, we're way past the 90s. And we're yet. We still have the same articles. I don't know, Matt, if that's one that comes to mind for me. I don't know if you have a different one. No, that's a super great one. That's a great example. It relates a little bit to this. I was actually just talking to a student about sometimes you might worry that the space sector is falling into the trap of if you build it, they will come kind of stuff, which, you know, the tech industry more generally has shifted much more to is there actually a customer who wants this before you build the tech?

And I do think that space is wrestling with that a little bit. The other thing I was thinking of, Anthony, that's like what doesn't kind of fit the standard model is like a business plan to settle Mars. That's not really a business plan in any sort of way that you would write it out and think that you'd make money. And yet, one thing we talk about in the book, and we talk about a lot with other people and with students, is that part of what brings people into the space sector is these crazy, exciting, inspirational dreams about reaching further and settling space.

And in some ways, even if that's not obviously profitable, it might actually matter for the bottom line for bringing smart people in. And we also probably wouldn't want to lose that part of space. So it's like everywhere else. You need like a constant car project, you know? Yeah, exactly.

Like you could pack the top talent to retain them. I mean, that's a problem with SpaceX, right? Now, like a lot of the people that were working on Falcon, Dragon, they're shifting over to the Starship program. If they don't want to move to South Texas, they're moving on to a different company and they're going to see the industry. So that is why companies like SpaceX need to continue to, as soon as Starship is working, expect to be like, well, actually the next thing is the thing that's going to be truly unlocking. It's like a, you know, bigger starship or a different thing altogether or whatever it

will be at that time. You do need to keep dragging along the top talent in that way. The other aspect of like, is there a business model for settling somewhere else is, you know, there's, there's obviously the historical analogs of settling North America and there's a lot of human conflict that is the side that doesn't really apply to space because there's no humans out on Mars that we know of right now So I separate that out and the problematic parts of that that there are But but one of the biggest

like if you look at that from this distance the economic value was because there's a Ton of humans somewhere else now and that impose different needs on the world and impose you had to get better at ocean travel and logistics to some extent and communication over those distances and. The mere existence of a bunch of humans again like they didn't know there were humans here when they left over there but now they know there's a bunch of humans over here so like that is an economic driver in a way that. You have to grapple with like how much does it cost to sustain. they know there's a bunch of humans over here. So like that is an economic driver in a way that, you have to grapple with like how much does it cost to sustain the Mars base? But once there's a bunch of humans there, that takes on a different meaning altogether.

And I think that's a better argument for the commercial space station type argument that you had of like, government's trying to incentivize this market to exist and then hope that it takes off. I can't turn the corner on that for commercial space stations yet. Commercial space stations looks a lot more like Earth imaging, which was a bunch of commercial companies existed and the number one buyer is the US government because they're doing it more efficiently than the NRO was or it's more survivable because, you know, Russia can't take out all the planet

satellites that are in orbit. So therefore we had a live feed of the Russian army marching into Ukraine Yeah, that that's a better match. I think then and I think Mars is totally different because it's the pressures of those environments are completely separate and it's longer term and it's way longer of a shot and It does take some truly crazy people to like work on it right now And it does take some truly crazy people to like work on it right now. But I think it's, I don't know, it makes more sense to my brain than a commercial space station does in a lot of ways.

That's really interesting. Yeah, there's so much in what you're just talking about. I mean, Brendan and I had this debate a lot when we were writing the book and teaching the class because, and actually the last session of the course, we have students, we play this little thought experiment. Like suppose you were given $2 trillion over the next decade to invest in space, like how would you, like where would you send that money? Right. What's your strategy? What's your vision?

And one of the, one of the big divides is always, are you sort of pro humans in space or are you pro automation and robots in space? And I've always been a little bit more on the pro human side, even though there's obviously, it's a lot harder in a lot of ways, very risky, et cetera. Because I think for a couple of the things you were mentioning, Anthony, which is like, as an economist, what is an economy? An economy is just people trading with each other. And I sort of feel like if we get more people up there for longer, it's going to force us to create things that, because

humans are very needy. Basically create businesses. We can plan a lot more. Exactly. And we're like super fragile and all this other stuff. So, but of course, that's not exactly a business model. That is something that the public sector is going to have to help in a big time with. And it's not the only, the other side of the argument is pretty strong too. There's moments though in space where you can see the existence of catalysts that might, I think my best example was I had this weird, at the time of James Webb's space telescope

launching, I had this weird theory of like, if this does go poorly, it would be the best thing to happen for human space flight in generations because we'd have a really good reason to, you know, start a huge program to fly out there and fix it. And, you know, I didn't want that to happen for sure, but I also wouldn't have hated that line of history that would have, I mean,

I think we might be entering a similar one where this asteroid that is now like, oh, it's a 3% chance of hitting earth. Like we're about to have a real discussion about planetary protection. If it's everyone's numbers can be different, but like 3% is getting up there, man. Like we take evasive action on, I mean, the pandemic that was probably around that percentage. If you run out the figures of how many people caught it, how many people died, like we've dealt with 3% before Climate change is in a similar, what percent chance is this going to kill all the humans? I guess those are the extrinsic motivations for these things. We do have historical examples where those things happen and incentivize the market to

exist or were the foundational event to create that. That, I mean, that's not something that you're ever going to be able to categorize in a way or like predict, but it seems like that was probably a thing that's happened a couple times in history that we can build on. Oh, for sure. And we haven't, I mean, we haven't talked about national security at all, which is even more Brendan's territory than mine. But obviously that's like another at this exact moment, another big driver of spending in space, which has exactly that double-edged sword feature you were just talking about. On the one hand, those of us who love space, great.

We love that there's more money and attention being poured into it, but it's not necessarily the most ideal way or the reason for it. Yeah, every once in a while, well, I'll take a step back. Most of my waking hours are spent thinking about the more practical, how do we make this business case close or how do we get this customer things a lot closer to home than Mars. But every once in a while, when it gets quiet and you start looking at the night sky, one

of the things I can't help but think about is this is just an amazing, amazing time right now where I'll get an email. It's like, hey, we've got this company that's asking about our prices for the moon. It's like, oh my God, what a time that we're living in. It's just an amazing thing. What feels really inspiring and sometimes a little scary, but always very motivating, especially having studied the history of spaces, like there are decisions that lay in front of us that could have a huge impact. We really don't know where this story goes.

I think we have the opportunity, and we talk about this at the end of the book, I think we have the opportunity, we talk about this at the end of the book, I think we have the opportunity to make this a beautiful, meaningful, truly impactful venture, one that improves human lives and makes this an exciting chapter in human history. But I think it's just like, it takes so much work, it takes so many talented people, and it takes a lot of time and patience. So when it gets quiet, I just think,

I feel so lucky to be alive at this point where the exciting things still need doing. We're still gonna do them. Yeah, and I think the book speaks to that really well. And even, I said up front that if you're super into space, you can skip to the back half of the chapter. I wouldn't because there's so much in the first half of the chapter. I was like, Oh my God, I totally forgot about that whole like side jag in history, right? Like there's, there are, because of the fact that space has been around

for decades and there's been attempts at these industries before, and that's not unique to space, right? Like Apple tried to release a tablet back in the day too, and the Newton didn't work out. And eventually the iPad did, but you'd forget about that by the time the iPad rolled around. And there's so many examples, space stations being a key one that there's been like somebody bought Mirror once and there's the weird, you know, programs that didn't get funded by the government but might have and a big old aerospace is a whole side tangent in history. There's so many moments that have like, and even some of the stuff that you're writing about that's relevant, you know, you guys were writing this from what, 2020 something to 2024,

and it's like, oh, that thing's like, it's basically way past that milestone now. So it's moving very quickly. And I think that's also good context for this. Well, and also, I'll just mention one thing that's I think so fun about what you just said is, you know, these sort of different generations of shots on goal, you might say, like asteroid mining is a great example, right? Like planetary resources into space industries, like the previous generation, you know, they didn't get all that far, so to speak, in getting close to the business model. On the other hand, it made like real contributions that the next people don't have to make in terms of getting the regulation set up and other than and so each generation builds on the

next and yeah so we'll see if Astroforge is is their timing is right or if they're still too early but it's exciting to see the next generation come along. Yeah one of the bits of history that feels like ancient history at this point is rereading Eric Berger's liftoff, which like, it's impossible to not think about SpaceX now, it's like, you know, this absolute monolith that's launching, you know, Sequoia-sized things up to space and it's just like incredible where they are now, they seem like undefeatable

and unstoppable. But you go back to like the early days of SpaceX, you're like, oh my God, this stuff is harrowing. It's like Lord of the Flies stuff and they're trying to launch rockets from this thing. They're throwing a, they're on strike essentially on this island until they agree to helicopter in more cigarettes and beer. And it's just like, for me, it's obviously a very fun story, but also it's like, I think about that every time I talk to a founder or also it's like, I think about that every time

I talk to a founder or someone who's like, I got this crazy idea and I'm like, I don't know. It's like, well, you know what? You're not trying to start a launch revolution from the middle of the South Pacific, so maybe it's not that crazy. I don't know. It's inspiring. There was no chapter on the economics of podcasts in space. If you needed someone to contribute that, it's short, but I can write that for you.

We'll add an epilogue to version two. Yeah, it's very short. All right, so you've mentioned the book's coming out February 25th. You have a favorite spot for people to pre-order? Well, it's on Amazon, easy to find. So that's a great spot. The other place you can... I always ask, because sometimes people are like, don't order on Amazon, but if you're

in the Amazon, order, pre-order it on Amazon. I always mention this. All the pre-orders get counted on launch day, so that like rockets them up the charts. So if you dig it, pre-order it, and that helps a lot. And the other place that you can check out if people are interested, you know, part of our goal here, we've loved teaching the students at HBS this stuff about space, but we wrote the book partly because that's only a couple hundred students at a time. But we've been doing lots of, I think, good work at the school.

And so if you go to economicsofspace.com, you can find more stuff that we've been working on and more people who are interested in this and just become a part of things. That's where we're going to put our podcast, too, once we get that. Big money maker. Yeah. Let me know how it compares to publishing. That's where we're going to put our podcast too, once we get that. Big money maker. Yeah. Let me know how it compares to publishing. We'll find out.

Our end game here. We wrote the book just so we could get into podcasting. That's the end game. Yeah. Listen, I'm supportive of that venture. I thank you guys so much for hanging out. You'll be on off nominal this week as well. I've got a whole other host of questions that are probably more off nominal specific, like

stuff about submarine industry and airplane industry and some weird economics of other industries that feel relevant that I've tried to ask people before and no one really knows what to do with it, but maybe you two will. So we'll see. We'll see what we get into there. We'll do our best. Thanks for being on this part one here with us. Awesome. Thanks, Anthony. Thanks a lot.

Thanks again to Matt and Brendan for coming on the show. As I mentioned, they'll be on off nominal tomorrow for part two, effectively. I've got a whole host of other questions that are going to be fun to dissect with them. So I can't wait to talk to them and Jake to get more into the book and some of the thinking behind stuff that's going on in the industry today. So I hope you enjoyed the conversation. And if you check out the book, you know where to find it. This episode of Made in Chicago was brought to you by over 850, almost 900 supporters of the show

across a couple of platforms. You can head over to madeinchicadoff.com slash support to join the crew there. And that includes 31 executive producers who made this episode possible. Thanks to Josh from Impulse, Russell, Jo Kim, Ryan, Lee, Fred, Pat from KC, Steve, David, Stealth Julian, Joel, Jan, Frank, Matt, Bob, Pat, Better Everyday Studios, Eunice, Donald, Warren, Theo and Violet, Chris, Tim Dodd, The Everyday Astronaut, The Ashtregators at

SCE, Will and Lars from Agile, and four anonymous executive producers. Thank you all so much for the support, for making this possible. As I always mention, this is a 100% listener-supported show, so if you like what I'm doing here, managercutoff.com slash support, that's where to sign up and get access to the other stuff that I do for the paid members, but also just help support and keep this thing going

and growing, so thank you all so much. If you've got any questions or thoughts, hit me up, Anthony at managercutoff.com, on Twitter at wehavemiko, and on Macedon at miko at spacey.space. I got at least one message on Blue Sky the other day, where I am acollangel.com. So if that's your thing, check me out there. But until next time, thanks so much for listening.

I'll talk to you soon. I'm a I'm a I'm a I'm a I'm a