Technology, Connected - Space Startups Promised The Moon. Then Went Bankrupt

Episode Date: March 10, 2026

Space SPACs promised to turn early space startups into public-market winners, but many collapsed before proving they had real products or real markets. This episode looks at the space investment boom through Virgin Orbit, Astra, Planet, SPAC redemptions, failed rockets, and the danger of valuing space companies on fantasy revenue projections. It then moves from speculation to coordination: the stag hunt problem in space, NASA’s changing role, Artemis, SLS, Starship, Blue Origin, lunar landers, moon water, and whether the next space economy needs NASA to become a trust builder rather than only a builder of rockets.--Thinking on Paper is a technology podcast about AI, computing, science, and the systems shaping the future.⁠Listen to every podcast⁠Follow us on ⁠Instagram⁠Follow us on ⁠X⁠Follow Mark on ⁠LinkedIn⁠Follow Jeremy on ⁠LinkedIn⁠Read our ⁠Substack⁠Email: [e-mail]--Chapters(00:00) What is a SPAC? (01:30) Why space SPACs failed (03:20) Virgin Orbit & Astra(06:00) SPACs vs Crypto(08:30) The Stag Hunt(11:00) NASA Artemis (13:00) Starship(17:00) SpaceX & Blue Origin (20:00) The Moon Race vs China (22:00) Can NASA survive

Space to Grow by Matthew Vinessel and Brendan Rosu. The book, the whole space industry is talking about, from SpaceX to Astroforge, they all have it on their desk. And we're renelled together in the Thinking on Paper Book Club. This is part three, and things get very expensive and very wild. A rocket company valued at $2 billion with no rockets. Virgin's intergalactic space stream gone in a puff of smoke. Three billion to bankruptcy in two years.

And now NASA is spending four billion. billion per launch and they're not really launching. While SpaceX might do it for 10 million, something has to give. Today we ask if the space industry can grow up, get its act together and work together and will NASA play a role in the future of space? Or will it just become another memory of a bygone era? Let's find out. Welcome to Thinking on Paper. Please enjoy the show. So, all right, enter the SPAC. Special purpose. acquisition company. According to Jeff Faust, veteran journalist, question, can you still spell space without SPAC? So let's talk about what a SPAC is and what it did to space investment in that

short term and then over the long run. What's a SPAC, Mark? A SPAC. Well, it's the hottest thing in finance is according to the Wall Street Journal. It's called a SPAC and increasingly it is the favorite source of financing for private companies looking to go public. Their purpose is to find a private company, buy it and take it public quickly. Some on Wall Street call them blank check companies because investors backing the SPAC put up their money months before an acquisition target is identified, trusting the people running the show to find a good deal. These deals are generating a lot of interest because they produce big paydays for their creators, make it easier for startups in hot industries such as electric vehicles to capitalize on frothy,

run up in the stock market and offer everyday investors a new path to a hot stock. When a SPAC buys a firm, it merges with it in a sort of accelerated IPO process, a so-called reverse merger while bypassing the normal scrutiny an IPO receives. End quote, Jeremy, what could possibly go wrong? Oh, my gosh. So a couple of interesting things to point out. So the SPAC actually has between 18 to 24 months to identify a target. a pile of money together, you get people agreeing to believe in your bet. So you're running the

SPAC mark. You put it out to a lot of people. They believe in you because you can find a good deal on a company. You can find a diamond in a rough, something that's missing scale, maybe two pieces, maybe two or three companies that would fit together in a beautiful Lego block to create something altogether amazing. Here's the interesting thing, though. Spacks have something called redemptions, which allows people who invest in the SPAC to decide after you put your Lego blocks together, eh, I don't really like this, Mark. I'm going to take my money in bolt. So you can actually get redemption. So here's what happens. You get this influx of money coming in. You get these targets identified. And a year or so later, they don't even have a product.

They barely have like some research and a concept. And a lot of the people are going, man, what's going on here? Mark, what's happening with this company? Yeah, I think I want my, I think I want my bread back. And because Spacks, at least the space focus ones in this period seem to determine the value of a company largely based on forward-looking revenue projections, startup CEO's incentivized to forecast exponential growth, even though that meant setting their firms up for painful and public blowback if they underperform. But it doesn't matter if all the investors get out. and you are left holding the can. What does this remind you of?

And I'll give you a clue. Web 3. Crypto, baby. Yeah. There was some SPAC action going on in that world too. Yeah, it's 2021, NFT, some of it. There's so much correlation and all of the big investment firms come in, the big investors come in.

And I don't know if it was as bad as in crypto, where the little where the retail investor is left holding the can, It's basically gone to zero, and a lot of these space companies followed the crypto trajectory, and they just crashed back into the ocean, didn't they? Well, let's share a couple of numbers here real quick. So there's space works. So space works tracks public startup stocks in public space startup stocks, calculated that $100 in space startup stocks purchased at IPO was worth about $10 by early 2024.

So big drop, a perfect example as illustrated in the book is Virgin Orbit. It's the satellite launching cousin of Virgin Galactic. So this is where redemptions come in. So they only received $68 million of the $228 million they expected. When they put out for the money, you have to subtract all the redemptions. So instead of getting $228, which they expected to do whatever they wanted to do with, they only got $68 million. So that's a really interesting example of what these redemptions can do.

And then also think about like a typical IPO according to space capital's Chad Anderson. As a general rule of thumb, it takes about six to eight years for a company to go from initial seed funding to IPO. Assuming in that course, they actually develop a product, they have product market fit, they have revenue, their scaling revenue. some of these were pre-product like even beyond. Astra. Let's talk about Astra, shall we?

Yeah. I mean, just going back to your point on the Virgin, I mean, if Virgin's base spinoffs can't make it, then a lot of people

are in for a tough ride if they can't make it. But so we spoke about Planet last week, debut to John public markets, planet was valid at 2.8 billion. On the other end of the spectrum was Astra,

a company hoping to mass-producing, to mass produce small rockets. Now, get this. Astra went public despite the fact that none of its test rockets, much less ones with satellites from paying customers, I repeat, none of its rockets, had successfully made it to orbit. Asthma was valued at $2.1 billion. Now, if that doesn't get you a little bit angry and doesn't remind you of crypto, then maybe you work for a VC fund. Dude, that's a very interesting parallel that you're tying together with

some of these SPAC deals in space tech and crypto because I think it's pretty appropriate. The idea that, yeah, the rockets never worked. Hey, guys, guess what? They didn't have one in, but it's a rocket company with no rockets valued at $2 billion. Guys, we're launching, thinking on paper launch services.

We're going to be able to put stuff up into lower earth orbit. If you need a ride, let us know, but we need about 200 million. Everything's in the works. You know, that's the, that's the medicine show, Mark. It's the medicine show. And it makes me angry personally, because as we've learned at thinking on paper, there are some incredible people, incredibly smart people doing some fantastic things. We need, I believe, infrastructure in space. We need these companies. We need these visionaries, these engineers, these crazy minds to go up there and build these incredible things. What we don't need is chances and nefarious investment machines taking advantage of essentially

humanity's challenges. That's what we don't need. So that makes me angry. But what is to come fills me with some optimism. Yeah, I think it's an unfortunate piece of code in human nature that it would be great to to have written a little differently and just the idea of being opportunistic and taking advantage of something at a certain point in time just to make a pile of money. I mean, that always will that always will be out there, unfortunately. Let's transition. Thinking on paper, we do always

tie these technologies back to what it means to be human and it's not always pretty. We're not here to celebrate all of the investment opportunities. We're here to work out what connects these companies to you and me and what happens on a regular basis. T.S. Virgin Orbit, whose 20-21 SPAC valued it at $3.7 billion when bankrupt less than two years later. 3.7 billion to zero. Two years. Dude, thinking on paper could do so much more with like 150K.

Let's prove it in the study. We'll do more in two years. I love Claude Rousseau. The French, I think it is Claude Rousseau, who said, we see too many Econ 101 principles discounted and with only lip service paid to solid market analysis, as if making the technology work guarantees big books. But a great technology does not a market make.

Blockchain, I'm looking at you again. Blockchain getting hammered again. Let's finish this chapter on the stag hunt game. Big things require two things. Coordination and trust. Okay. and I have to be able to coordinate and collaborate, and I have to trust Mark. He has to trust me. That's a big gamble, I think. And that's why we're not seeing so many people in the space tech

industry pair up to go hunt stags. They're still hunting hairs. What do you think? The easy way versus the hard way, my way or the highway. So we can all make small little satellites that orbit the earth and take nice photos and take nice video and give it. us some nice data about the weather forecast in Mongolia and we'll all make a little bit of money. We can all do that or we can group together and build Gerard O'Neill orbitals up there or we can really catapult around Jupiter out into the Kuiper Belt and build stuff out there like these grandiose visions but to do that we've got to stop building these little tiny satellites taking pictures and selling data and focus on something huge and big and immense.

stag and either we all do that or none of us do it. We're not ready for it. Like we're not ready for it. You're investors in your cookie factory. Don't give eight shits what my investors in my cookie factory want. And that's the, that's the breakdown. And it's it requires a coordination. It requires, we talked about this with the CEO of Iona this week about drones.

We talked about this is another Pachy McCormack, most human wins reference, moving up one level of abstraction. And that requires humanity to move up a level of abstraction in order to hunt stags versus smashing hairs with a hammer. I like it. One last question before we move on to NASA and Artemis, what would be an incredible stag in space? I said slinging around Jupiter and building hotels out in the Kuiper Belt. Not very realistic. Our authors, Matthew Wienzel and Brendan Rousseau, who we hope will be thinking on paper with us one day, not too soon, and we'll ask them this very question to see if they have changed their minds since they wrote this. For the two of us, beyond the expanded use of data from and through space,

our space stags include research and manufacturing in Earth's orbit, lunar development, in situ resource utilization, Mars exploration and space-based solar power. Any that you would add to that, Jeremy? Would you add data centers in space? I wonder if they would add data centers in space now. I think they probably would. I think the solar power slash data centers in space,

space space space, solar power, data centers in space are kind of the same tech, different outcomes, I think. So I think you could maybe bet on both at the same time. Okay. All right. Artemis. Artemis, the new model goes to the moon. We're going back to NASA.

They like to spend some money at NASA, don't they? The new model, did you say? Well, that's what it says here. Chapter 7, Artemis, the new model. some of the questions that before we get into this, Mark, that I thought were really interesting. This is a question written by the authors. What is NASA's place as the space economy continues to emerge, right? They're this agency and transition, and they've evolved when they've needed to.

And it's interesting, we talk about coordination, we talk about trust, we talk about the stag hair game, the stag hunt game, requiring someone or something in the middle to coordinate and manage trust and all of that. Could NASA be that thing? as it evolves. So what place does NASA play? Historically, they play a very, very important role. Going into the future, a lot probably hinges on what Artemis 1, 2, 3, 4, 5 and 6 achieve, and what SpaceX and Blue Origin achieve in a very shorter, probably timeline. And at what cost?

Well, let's talk about what Artemis is, right? So Artemis 1, 2022, uncrewed mission, around the moon, came back, successful. Artemis 2 in a few weeks is going to largely repeat a similar thing, except it's going to be a crude mission, 10 days, looping around and coming back. Artemis 3, 2026-ish, I think, will involve a South Pole landing. Why the South Pole mark? The South Pole has enough frozen water equivalent to 100,000. Olympic swimming pools.

What can you do with water? You can live, but you can also make rocket fuel. Way station of the future, right? A lot of cool things going on there. There's also some helium three, isn't there, down there? And some other resources and minerals, not just the water. I'm sure the water gets the investment or gets the newspapers happy. 100%.

And I'll just run down these others and we can dive back into it. So then Artemis 4 and 5 is this gateway station. So a lot of people are, some people are calling it just another ISS in lunar orbit. And then Artemis 6 is the ability to dock with that way station and then carry people down to the lunar surface. Go on then. How much is it all cost so far, Jeremy? What are the projections for NASA and the Artemis program so far? Each, quote, each launch of the rocket in its space capsule, Orion is expected to cost $4.2 billion.

4.2 billion. So NASA, or let's see, by the time the SLS launched, and that's the, that's, that's, that's, that's, that's, that's, that's, that's. What's the SLS, Jeremy? Another creative name, space launch system. Guys, we can help you with some better names. They mean the big rocket that blasts up is that, that, that's, that's, that's, that's, the big rocket they're calling the, the, the space launch system. Remind me, NASA was four point two billion for each launch up is that. of the non-reusable space launch system rocket.

SpaceX estimates that Starship launches could cost as little as 10 million by the late 2020s, though it's important to note that these are estimates for SpaceX's internal costs and not the price it would charge to customers like NASA. But these cost estimates may be optimistic, boasts, not like Elon to boast, but even if Starship costs are much higher, say 100 million per launch, that would still be 40 times cheaper on a per launch basis than what NASA is spending. Even if Starship launches cost 100 times that, what SpaceX says, around a billion per launch, that would still be one quarter the cost of an SLS Orion flight.

I think we've seen with SpaceX that even if their 10 million by the late 20s is an over-sell, it won't be that much of an over-sell. totally agree so one of the reasons i think they were leaning on this sLS model i think there were old components from the space shuttle program that they were trying to reuse they're going hey maybe we could dust these off and not it's i don't mean to be trivial there there's a lot of effort that goes into making pieces and parts put into a rocket and using stuff you have is always is always good to think about but sometimes when you use stuff you have it ends up costing more than you think. So why the heck aren't we using Starship? Mark, why is SLS in place instead

of Starship? Artemis is scheduled for launch. There is no Starship. As yet, NASA Administrator Bill Nelson quote, there's only one rocket that's ready to launch at SLS and the Orion Space Capsule at its tip is also the only vehicle in which the crew can survive and return to Earth. At some point, Elon Musk would like to be able to do the same with his starship, but we have a deal with the practical here and now. Look at you with your American bravado, man. So let me, let me bounce that to a quote from another NASA associate administrator, Kathy Luters, towards the end of the chapter, quote, NASA has a very hard time going from saying, I'm the one doing it to we are doing it. I would argue, maybe it was in your delivery of that quote, but there's something, I think there's

something to that. There's a NASA, NASA was born out of this, this, we're getting to the damn moon and we got to the damn moon and there's this, you have to have a little swagger about it, but like, this chapter points to some of the evolution of, of where that's headed. And I think the really interesting thing, the thread of that that I thought was really cool is instead of funding, NASA completely funding this public good and making and delivering this public good and public good being, hey, getting us to space, opening up opportunities for humanity, all of that stuff. Now it's more of a pivot to, according to the authors anyway, which I thought was really interesting, a pivot to enabling private companies, funding private companies to develop the actual tech

and manufacturing and the service and all of that stuff. So I think there's the evolution that they're talking about. We love NASA. We're not poo-pooing on anyone's parade. And we're speaking about Artemis 1 and 2 really. It's not like NASA is ignoring the promise of Starship and other commercial launch vehicles for Artemis 3 and 4. Is it, Jeremy? Yep, yep. So they're leaning on a couple of well-known players.

Can I guess? Can I guess, could I guess? Can I guess? Is it SpaceX and Blue Origin? You're 100% correct? 100% correct? So, so there, it's, I think, I think they're seeing what's happening.

But there's another bet. There's another thing, too, about just we got to do it. right? We got to do it. And part of maybe NASA was thinking, you know, we got to get going. And this is a way to get going. I don't want to continue to wait for this first step. Let's push this first step out. And then we can save in the long run by these, you know, these partnerships are in parallel to this first step, which is really cool. They're talking about the value of decentralization that they refer to on NASA's plans for lunar surface stuff. Imagine how difficult it is to reinvent an agent. agency like NASA. Imagine like the amount of open-mindedness, the amount of objectivity, the amount of, I don't know, I think those two things to pivot something that large to do something different. I think it's really cool. Yeah.

And a lot of people possibly having to check egos in at the door. And yes, we did this and it was just incredible, but now we have to do that. I just want to quote to ferry astronauts down to the lunar surface for Artemis 3 and 4, NASA ran a competition and opted to have SpaceX developed the lunar lander. When astronauts land on the moon for the first time in over half a century, it will be from a modified version of Starship. For Artemis 5, NASA selected a lunar landing craft designed by Blue Origin. Under these agreements, the agency is paying a fixed sum for lunar landing surfaces.

4 billion to SpaceX, 3.4 billion to Blue Origin. It's a mixture of old and you. We've given NASA a bit of a hard time because they're spending just incredible amounts of money. But there are, as you said, some Foresight, a new model incorporating private with the public. And yeah, they want to get to the moon. They want to start building.

And so they've got two paths to get there. Well, I think what's interesting too, there's a couple of nods in here of like what this Artemis mission is going to enable with other companies and thinking about just infrastructure on the moon. How do we build roads? How do we get power across it? How do we harvest the water and use the water to do what we need to do? So there's going to be like this is an entire new economy that is infrastructure oriented just in a new spot.

There's one other reason that we haven't mentioned, which is perhaps why NASA are building their own rockets and focusing very much in-house for Artemis. one and two. And that might be that we're not the only ones trying to get to the moon, are we, Jeremy? It's a race, Mark. It's a race. We got to beat them. We've got to beat them. Yeah, 100%. That's exactly what got us to the moon last time.

Yeah, the Russians beat the US. The US was like, man, we got to chase them and we got to make sure we get up there before anyone else. And it's a signal. It's a signal to, the world, I think, in a lot of ways. Yeah, I think that might be, you know, the first person commercial activity on the moon, you get there, you start building, you're first in, you're first there, you have a lot stems from that. How do we want to wrap this one up?

What's your astronaut called behind you, Jeremy? What, what did we name my asteroid? It's astronaut. Astronaut Alice. In 25 years when Alice, and Alice. her peers are old enough, big enough and wise enough to be astronauts. Do you think they will be flying on NASA space? Do you think NASA will still exist in 25 years? Do you think that the name will have become a monument to history? Or do you think they will be heavily involved in the space

industry? Because one of the interesting things I learned in this chapter was that NASA isn't set in stone. Do you think it will still be there? That's correct. I think the agency has a tremendous opportunity to fill this gap of coordinator and trust enabler for the space economy. You know, this quasi, you say independent, but it's a U.S. organization with international affiliates or connections and that sort of thing.

If it evolves the right way, and the end of this is talking about how an old agency can to enable the space economy. I think if it evolves the right way, I think it could fill that gap that is keeping people from hunting stags. Well, there you have it. Stay tuned for more thinking on paper at XYZ. This is a book club.

Book club is turns reading into a team sport. I don't have to do it by myself. I get to bounce my ideas off. Mark, eventually we're going to do this live with everybody who's reading the book with us. We're going to time it. And we're going to invite some key people to jump into these books.

But until then, listen to the episodes, drop some comments. We'd love to hear what you're thinking if you're reading this book too. And in the meantime, stay curious. Be disruptive. Keep thinking on paper.