This Week in Startups - Today's Space Tech Boom with Apex's Ian Cinnamon and Mark Suster | E1946

Episode Date: May 9, 2024

Squarespace - Turn your idea into a new website! Go to http://www.Squarespace.com/TWIST for a free trial. When you’re ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain. LinkedIn Ads - To redeem a $100 LinkedIn ad credit and launch your first campaign, go to http://www.linkedin.com/thisweekinstartups Dot Tech Domains - Dot Tech domains are the go-to namespace to build anything in tech… and home to the world’s most innovative startups. Keep an eye out for our “Jam Session with JCal” contest… coming soon! Be sure to secure your .Tech domain today at https://get.tech/jason * Todays show: Ian Cinnamon joins guest host Mark Suster to discuss all things space tech; including: the importance of building Apex in L.A. (4:49), the drastic change in costs for satellites (16:03), their first Aries Satellite bus on it’s maiden voyage (30:29), and more! * Timestamps: (0:00) Ian Cinnamon joins guest host Mark Suster. (1:53) Why space is a hot sector right now with startups and investors. (4:49) The importance of building Apex in L.A. (6:44) Ian’s background and what brought him to the space industry. (9:52) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at http://www.Squarespace.com/TWIST (11:13) Origin story and perfect fit with Apex co-founder Max Benassi. (13:25) What Apex does and why Max’s manufacturing skillset matters. (16:03) Cost of satellites then and now. (19:55) LinkedIn Ads - Get a $100 LinkedIn ad credit at http://www.linkedin.com/thisweekinstartups (21:25) Details about the sateliilite bus at Apex. (23:43) The differences and business implications of LEO, MEO and GEO. (29:15) Dot Tech Domains - Be sure to secure your .Tech domain today at https://get.tech/jason (30:29) Their first Aries Satellite bus on it’s maiden voyage and a selfie from space. (53:30) The current scale and expected growth at Apex. (56:19) Competitions in the “space” space. * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Check out Apex: https://www.apexspace.com * Follow Ian: X: https://twitter.com/IanCinnamon LinkedIn: https://www.linkedin.com/in/iancinnamon/ * Follow Mark: X: https://twitter.com/msuster LinkedIn: https://www.linkedin.com/in/marksuster/ * Thank you to our partners: (9:52) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at http://www.Squarespace.com/TWIST (19:55) LinkedIn Ads - Get a $100 LinkedIn ad credit at http://www.linkedin.com/thisweekinstartups (29:15) Dot Tech Domains - Be sure to secure your .Tech domain today at https://get.tech/jason * Great 2023 interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Substack: https://twistartups.substack.com Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups * Subscribe to the Founder University Podcast: https://www.founder.university/podcast

Give us some sense in of the magnitude of how difficult it was to launch. What was it from? We have some money. Start the clock to actually getting something launch in space. And how impressive is that relative to what other people take? Historically, we talked to a lot of experts and they said, you should estimate about three years and about $50 million to get your first satellite to orbit. We did it in 12 months. And we ended up spending well under $10 million to get that first satellite to orbit.

That was hard. This Weekend Startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash Twist for a free trial. When you're ready to launch, use offer code Twist to save 10% off your first purchase of a website or domain. LinkedIn ads. To redeem a $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this weekend startups. and dot tech domains.

Dot tech domains are the go-to namespace to build anything in tech and home to the world's most innovative startups. Keep an eye out for our jam session with J-Cal contest coming up soon. Be sure to secure your dot-tech domain today at get dot-tech slash Jason. Welcome back to this week in startups. No, I am not Jason Kalakanas. I am Mark Suster and I'm incredibly excited to have. Ian Cinnamon, the co-founder and CEO of Apex Space with me today. Welcome.

Thanks, Mark. It's great to be here. I have spoken with you before about the company many times. I'm really excited to get into Apex Space and why you started it. I wanted to just start with a little bit of a primer for people. So I thought maybe before talking about Apex, we could talk about the industry. Maybe you could tell me why you think space is having such a moment right now, because I know it's getting a lot of attention from investors and founders. Space has absolutely become, I think, a core focus for many, many industries, right? I think people often think of space as kind of its own industry, but the reality is it's something that's enabling so much more.

And to your point, there's a question of like, why has this suddenly become this focal point of attention? And it really comes down to the full process of taking something on Earth, putting it in space, and having it do its business, whatever that may be. And if you think about it, you start out with some sort of satellite or payload here on Earth, and you need to launch that from Earth and get that up into space, right? Whether that's right above the atmosphere in Leo or even higher into Mio or geo or to the moon or beyond. I mean, we can get into some of those specifics later, Ian, but like, why now?

Like, why do I keep reading about VCs funding businesses now? It all comes down to the fact that getting from Earth up into space, the cost and the frequency of that happening has fundamentally changed in the last couple years. So it's really thanks to companies like SpaceX, Rocket Lab, and others, luckily all based here in LA, but that have massively lowered the cost. So if you wanted to launch a satellite size of a refrigerator, you know, call it five or 10 years ago, you were looking at maybe $10 million and having to wait several years to get

that to orbit. Today, you're looking at pricing that at just over a million dollars. And, I mean, SpaceX is launching nearly every day or even multiple times a day now. I think in my knowledge, what really has happened is the Falcon 9 being relandable has dramatically both lowered costs and increased frequency of the two things that you mentioned. Really, SpaceX being based in Los Angeles, what I've noticed is a lot of the engineers that were at SpaceX, I mean, SpaceX has been around for a long time now, have now started to spin out and create their own startup.

So, you know, I noticed, Ian a similar trend in 2009, which was four years after Amazon Web Services launched, AWS, suddenly the costs of creating a startup went from about $5 million to $500,000. The exact same dynamic of what we're seeing in launching in space right now, a 90% reduction and then a further 90% reduction.

And what we saw starting in 2009 was this kind of Cambridge explosion of startups, creating companies that couldn't have been created before. And I've noticed the same trend in space as SpaceX has made it 90% cheaper. Suddenly, people have ideas that wouldn't have been practical before. Does that sound reasonable to you as a thesis? A hundred percent, right? It all comes down to you. You could get to space much more often for much lower price point. And the brilliant engineers who pioneered that are now saying, well, I want to go put things in space and I want to keep this momentum up. And you're actually

from Los Angeles, right, originally? Yes, that's right. I'm a valley boy, grew up in Sherman Oaks. And you're creating your company here. Why, L.A., why wouldn't you go build this in Silicon Valley or New York or somewhere else? Look, I lived in the Bay Area for many years. I lived on the East Coast. And at the end of the day, it was not just about, hey, I want to come home to where I grew up

in L.A., but it really came down to the density of the talent in Los Angeles. And look, you mentioned SpaceX, tremendous amount of amazing talent. My co-founder came from SpaceX and spent the bulk of his career there, but it's not just SpaceX. I think everybody forgets we have Caltech and JPL right in our backyard here in L.A. And we have this amazing concentration of fabulous universities, everything from UCLA to USC to Pepperdine to all of these other schools right here where all the students are being inspired every day by all of these companies like SpaceX popping up. And then finally, you can't forget about the traditional aerospace side, right?

The companies like Northrop Grumman and Lockheed Martin and all these others have always historically been in the L.A. area. In fact, Northrop Grumman's headquarters is called Space Park, and that's located in the center of L.A. When you think about the pioneers of space, you think of Howard Hughes and of course Hughes Aircraft is here. When I talk with investors, the very first thought that investors have about Los Angeles is Hollywood. And Hollywood is such a small part of L.A. And I always try to remind people that we design the rockets that put a man on the moon in Los Angeles. JPL, for people who don't know is the Jet Propulsion Laboratory. It's the National Laboratory for where they designed the propulsion that figured out how to get rockets to the moon. And it was a huge advantage

to the United States having it here. Caltech, of course, one of the leading, if not the leading sciences school in the United States. And that partnership and collaboration was really important. So you talked a little bit about living in Northern California, maybe just before we go into Apex, you could tell us a little bit about your journey. Like, what have you done in your past and why did space intrigue you? Absolutely. Well, a group here in Los Angeles, and I have to say, as a kid growing up here in L.A., the fact that we were surrounded by the space ecosystem was apparent even back then decades ago.

And I always love the idea of space. but I frankly shied away from it for many, many years. And the reason was everything that you outlined before, right? The cost to get the orbit was too high. The frequency was not high enough. And really, the only people decades ago going to space were government agencies or really wealthy billionaires. And I was neither of those.

So after college, I ended up moving to the Bay Area, focused on software, actually. And I started a company up in the Bay Area, started working on in 2015 called Synapse. and it was applying artificial intelligence and computer vision to different national security applications. So we looked at everything from how could we help streamline airport security working with organizations like TSA, or how could we help better analyze footage coming off of drones and a little bit on satellite imagery as well. But frankly, in 2015, as we mentioned, that Cambrian explosion hadn't quite happened yet,

and there just wasn't that much there. I grew that company over several years. And for me, one of my big learnings was if you're going to go start a company, like, there's no fun in a company that's just kind of chugging along in this steady state. And I'm somebody, if I'm going to do something, I put my 200, my 300% into it. And if you're going to do that, you want to aim really big. And my company synaps, it was doing well, but it wasn't taking off like a rocket ship, not to use a space analogy, but you kind of have to. And realize that at the end of the day, the best outcome for that company was going to find it a new home. And we were very fortunate to have worked with a company called Palantir a handful of times.

And they had approached us about wanting to buy the company and we moved forward and sold it to them right as COVID was hitting in 2020. And as that happened, join Palantir and had the opportunity to work on several different programs where we were analyzing downstream satellite data. And for me, the first time I kind of started to dabble in that when I was at Palantir, my first instinct was, oh, I've looked at this before. where it's just some government agencies or some wealthy people, like, there's not that much of a market here. But in 2020, I was completely taken aback.

I was wrong. And I started realizing that there was all of this satellite data suddenly that it appeared between 2015 and 2020. Cambrian explosion had finally taken place. And all of these new companies were emerging, all of these commercial entities, not just government, were putting satellites into orbit, were sending their data, and I got to start working with all of this data. And for me, it was almost all these childhood memories started coming back where I said, okay, I used to love the idea of space, but all of the sudden, I was seeing companies that had raised a similar amount of money that I had raised at my last company, Synaps,

were putting satellites into orbit. And I thought there's nothing more promising that I could do than go and try to engage in that industry. Hey, startups. You ever noticed how successful businesses are constantly evolving? Well, that's because they add fresh features to get their customers excited. and that's why I am all in on Squarespace and you should be too. Squarespace is adding new features and revolutionizing their platform all the time.

I've told you this before. This includes powering all their tools with AI, you guessed it. And one of my favorites, this is incredible, is Blueprint AI. Yes, it's their guided design system for building a new website. It's fast, it's custom, and it's built specifically for your business needs. They've put over a billion design combinations at your fingertips, so you get an online presence that's unique to your brand. We used it to build our own founding university.

website, the process was so simple. We were prompted through a series of questions, and then Blueprint AI took control, tailoring everything to our preferences from website structure to the color scheme, very important for me, and from design elements to font pairings. I love fonts, by the way. It's just one of the things I'm into. Boom, within minutes, we had a sleek new website ready to go live. So check out Squarespace.com slash twists for a free trial and make sure you try this Blueprint AI tool. It's amazing. And when you're ready to launch, go to Squarespace.com slash twist to get 10% off your first website or domain purchase. That's Squarespace.com slash twist. And just all, you know, to your horn since I know your background, your MIT undergrad,

your Stanford Business School. But Max Benassi, if I pronounce his surname correctly, he really has a specific background that was useful to you. So maybe we could talk about Max and how you guys came together and why his background is so vital to what you do. Absolutely. So I remember. I remember when I was very early at Palantir. So this is many, many years ago, this back in early 2020. I was still living in the Bay Area. I came down to Los Angeles to visit a good friend of mine, who I actually went to high

school with. And I was at my friend's apartment, and he was an aerospace executive recruiter. And his roommate walks in, who's Max, who's now my co-founder. And his roommate and I just start talking. And I was captivated. And Max's background, he had spent the bulk of, of his career at SpaceX, and back when I had met him in 2020, he actually had just quit SpaceX and was moving up to the Bay Area to join Astra. But he wasn't just yet another engineer at

SpaceX. He had this incredibly unique role where he was the engineer in charge of taking a given aerospace component and saying, okay, we made one of these. How do we go make one of these a month, or one a week, or one a day? It was all about design for manufacturing and scaling production. And when I met him, I knew there was something special about him. He wasn't just that engineering mindset. I knew there was something I wanted to work with the guy. And we kept in touch and he moved up to the Bay Area to scale production at Astra, focusing a lot on their, it's called the EP system, basically a thruster for satellites

and some other satellite components. And we kept talking. And we just started this gravitational pull kept bringing us together where we just kept brainstorming these ideas. Boy, you are filled with space-based analogies or space-based words to use. So I'm going to make you drink a beer every time you do that. But let's dangerous. Let's specifically, though, talk about what you do because you're mentioning that Max brings an expertise of mass manufacturing ability to produce a lot of product and lower costs. And I happen to know that's also his background. That's what he did at SpaceX. That's what he did at Astra. So you saw,

that skill set, what does Apex do and why does his manufacturing skill set matter? So at Apex, we build the core component of satellites. And the industry term for that is a satellite bus or satellite platform. And historically, but those platforms are not new. They've been made for 50 years. But they've never been made in a high production productized way. So Max comes in and he takes the design for one of these satellite buses. And we say, instead of building a, a bespoke one, he brings his engineering brilliance to say, how do we turn this into a set product? We put it on a production line and we go build a whole lot of these for very, very officially. The way that I kind of see it from our previous conversation is this.

If you think of SpaceX reducing the cost by 90% to launch, you still need to reduce the cost massively to satellites to get a lot of them out into space. So you can have a frequency of cadence of launching these things, but if the cost of the satellite is prohibitive, you're not going to launch as many. And I think that's where you step in. Is that a fair way of saying it? That's exactly right. And one thing that I'll add to that is it's both cost, but it's also the frequency. So if you have the ability to launch a rocket to get from Earth to space, call it every day, but it takes you five years to build your satellite, there's going to be a lagging indicator where you're basically building all these and it takes five years before you're ready to

launch them. The demand is there to launch significantly faster. And so you mentioned that you're a satellite bus and from what I understand, there's both a bus and there's payload. So let's break it down for people. Payload might be a camera. It might be optical equipment to observe what's going on on the ground. It might be radar equipment, which is doing observational data. So, like, I assume that the people who build that stuff specialize in that. Once they build that, how were they in the past getting onto a bus? Like, how did all this happen before and how are you planning to disrupt the market? That's exactly right.

These companies, they specialize in their payloads. I mean, even something like a human life support module where you literally have humans in space could be considered a payload. Historically, you go to your typical large primes, right? Your Northrop's, your Lockheeds, and these are fabulous. companies, they've been building satellite buses for decades, and they go, they take your payload and they say, Mark, I'm going to go build you a satellite bus that is perfect and bespoke and exquisite just for your one payload. And that's worked well. And so roughly, what was the cost of that?

So for, you know, a lot of it comes down to size. So just to compare apples to apples, let's say it was a Earth observation camera, right? Maybe something to monitor for, you know, climate change to monitor the coast, for example. you would be looking at a satellite bus costing somewhere $30 to $50 million, and that's just for the bus, not for the camera, and taking five to six years to produce. Okay, so $30 million plus to produce the bus,

the payload is how much in terms of total cost? Call it, you know, usually a rough estimate is about half the cost goes to the bus, half goes to the payload. So was it $60 million to launch a satellite? And then call it, you have to pay for the launch, right? So I just want the cost of the satellite. So just the cost of the satellite, we already said the launch has come down by 90%.

So that's becoming a less critical component of this, although you need to book time on Falcon 9. And I'm sure that's becoming competitive. What do you imagine satellites are going to cost going forward? Like, what do you want to do to bend the curve down? I would love to see a world where there's more and more business cases enabled by satellites. So single digit millions or even lower is the world that I would love to see us get to because that just enables more and more great businesses to launch their payloads. Today, as we sit here in 2024, going into 2025, are there going to be sub-10 million

dollar satellites launch? Is that already happening? It's already happening. That means that your cost of manufacturers below five million. I mean, I don't want to put you on the spot to say how much your units cost. And I will say, we love price transparency. So you could actually go on our website and see our pricing in real time. I can add it to the shopping card and buy it real time.

Literally, you can use Apple Pay. You can go check out with a credit card. We actually just had somebody do that a couple hours ago to buy a satellite, which is phenomenal. But they started about $3.5 million. Okay. And that's the price. That's on our cost. That's the price.

So that is, I mean, that's literally almost a 90% reduction in the historical cost. So there's, I understand about 5,000 satellite. in space? Is that about the rough number that you have? Yes, but there's more going up every day, but yes. How many do you think are being launched per year right now? Like, how is that going to go from 5,000 to 15,000 to 25,000? Or is there a certain period of time with which now we have enough satellites and there's no more demand for it? If you look at how the market's evolved over the years, there's actually been some interesting trends. So historically, if you rewind five or 10 years because launch costs were so expensive, people would usually launch one gigantic

satellite. I think something that's literally the size of like a school bus, absolutely massive. And they would spend all this money to launch it and it would last in orbit, call it 20 some odd years. But the problem is whatever, like let's say it was a camera taking photos of the Earth, 20 years later, you're still using a 20 year old camera. So obviously the sensors have evolved. because launch costs have come way down, the industry is shifting towards this idea of launching

what they call a system of proliferated and attritable smaller satellites. So they could say, hey, launch costs have come down. Instead of launching one giant one, let's go launch 100 or a thousand smaller ones. So on a pure just market basis, we're seeing an exponential increase in the number of individual satellites that are being launched. On top of that, SpaceX is launching more and more frequently, which means even more satellites can go up. And on top of that, SpaceX and other companies are announcing things like Starship that are fundamental order of magnitude game changers for the amount of mass that we could get from Earth up into space. Navigating the B to B maze can feel really tough, huh?

If you're trying to hit the mark with all those top-tier executives, you want them to pay attention to your enterprise product. But where can you find all those big fish, the whales? The ones who call the shots and make the buying decisions for corporations, for startups, and everybody in between. Well, here's where LinkedIn ads is going to solve that problem for you. And I've used this. It is one of my secret weapons. LinkedIn means business.

Business equals LinkedIn in people's minds. When you're on LinkedIn, you're in the business mindset. So you're going to really be thinking about business products and services. You're open to those opportunities. and LinkedIn recently passed a billion users. 180 million of those billion are senior executives, 18%. But hey, we all know about the 1%. 10 million C-suite executives.

That's your CFO, CTO, CIO. These are the people who are always looking for a new product or service to make their organization run better. But they are on LinkedIn. That's why LinkedIn's ad platform delivers two to five times, greater return on investment compared to other social media platforms. So easy to understand why this is, because this is where all the business people are and they're in that business mindset.

Super easy, call to action. Make your B2B marketing everything it can be and get a $100 credit on your next campaign. Go to LinkedIn.com slash this week in startups to claim your credit. That's LinkedIn.com slash this week in startups, no spaces, no dashes. Terms and conditions apply because they're giving you a hundee. I want to go through things a little bit piecemeal. Like I know you talk about a bus, a school bus-sized satellite being launched. And I know that there are companies in Los Angeles launching Q&D,

tubesats that are the size of like lunch boxes, right? So there's going to be a proliferation and size and types of satellites launched. You're trying to standardize that, right? You're trying to produce a more standard bus so that people who want to get stuff to space, like can more easily design things to go to space. Is that kind of roughly what you're doing? That's precisely right. So we don't build every kind of satellite. We narrow the scope to what we see is kind of the three core areas of the market. What goes on your bus? Like, what is included? Yeah. So think of it is everything that you need to make a payload function in space. So what I mean by that is, we give the payload, which could be a camera, for example, we give it power, we let it know where it is,

we let it communicate with the ground, we let it move around in space. We give it thermal capacity so it could, you know, exude heat, et cetera. As I understand it, the satellite that gets launched today. I mean, it is an interesting thing you say. Like, historically, if I launched a 20-year satellite and I had a camera on there, I mean, imagine having your iPhone with your camera on it have to last for 20 years while technology is moving on. I mean, there's kind of a good analogy I can see, which is my car. Like, if you buy a car, historically, the entertainment system that you had was outdated by the time the car even launched. And then five years after you own the car, you're like, why does it have this shitty, you know, entertainment system?

And now with things like the Tesla, they launch it with updatable software, right? So surely that's going to happen more in space, but the hardware itself can't really be replaced. I think satellites launching now last, into low Earth orbit, last about five years. Is that right? That's precisely right. And that's driven by two things. So first is, if you're closer to Earth, gravity is pulling you down. So you have to constantly push up against gravity to stay in orbit.

And two is, it's exactly what you said. People are realizing because the cost has come down and the frequency has gone up, the business model now makes sense to just launch a new satellite every five years instead of trying to say, oh, let's keep this one going another few years. The buses combined with payload that you're launching today are designed to launch in low Earth orbit. Can you talk about Leo, low Earth orbit, how far away that is, how many of the satellites that exist in space are in Leo versus other orbits? Absolutely.

So there's a few different orbits. And the orbits, the easiest way to think about them is how close or far you are from Earth. The closest orbit to Earth that a satellite usually exists in is low Earth orbit or Leo. And that is call it four or 500 kilometers of altitude. And if you think about it, like, that's not that high up, right? Like, you could go drive four or 500 kilometers in a single day in a car. So it's something that's not that far away. And if you're that close to something, the benefits of that are it's much easier if you

have a camera to see the Earth because you don't have to zoom in as far. If you have a communications platform and you're trying to, you know, let IoT devices connect or provide internet access, the amount of time it takes the radio waves to transmit is much smaller so you have a better signal, et cetera. The downsides of it, however, because you're closer to Earth, you can't see as much of Earth at any given point in time. So you're basically focusing on one little point. So to get global coverage of Earth, you need a lot more satellites in Leo. Now, if you go higher in altitude to medium Earth orbit or geosynchronous orbit, you have something where you're basically

able to observe all of Earth that's visible, right? So you see the whole Earth and you're kind of much further way. Think of it like 30,000 kilometers. So much further distance where you could see all of the Earth. And that's the benefit. But then the doubt. downsides are, takes more time to transmit, you need a much higher quality payload, etc. So there's tradeoffs to both. To give people perspective, there's a little bit under 600 satellites, as I understand it, that are in geospatial orbit, and there's about 5,000 in Leo. So like if you look at Leo, geo and meo, meos, I think 150.

So really 90% of the market today is Leo, right? So that's the market. Yeah. When you hear people talk about satellites, you're mostly talking about Leo. And I assume that's where Starlink operates, right? Because that's where most of your communication for Earth is because you want a shorter period of time from Earth to be able to transfer back to Earth for things like phone calls or transferring data. Yes. I will say that's only a very recent trend.

So if you rewind five or ten years, there were. most satellites were in geo, not in Leo. It's only because of the cost of launch. Leo has been the booming market and is anticipated to be so. I don't need history lesson. We're focusing on the future and the future of apex. So part of what you need to do, as you described it, is you have the Earth and you have a satellite in Leo and the gravitational force is pulling you back to Earth constantly.

So you have to have propulsion. You have to have fuel that keeps you from the, and I assume you provide, do you provide that? Is that part of the bus, like the propulsion? Absolutely. So the whole mentality that we have is you can't have one bus that works for everybody. So you have to pick different configuration packages. It's like your car analogy, right? If you're going to buy a car, do you want the seat warmers?

Do you want Sirius XM radio? So different customers, depending on what they're doing, need different types of propulsion. You could either get away with no propulsion, which means you're going to deorbit much faster. So the satellite doesn't last as long. You can use something called electric propulsion, which is what my co-founder, Max, scaled production up when he was at Astra. That basically keeps you at one point and pushes you up slowly. Or you can use chemical propulsion, which is much stronger and pushes you much faster up,

and that's if you need to move around in Leo. So it really depends on what you need. And so basically the satellite orbits the Earth. It takes, what, 90-ish minutes? 90 minutes. Okay. And depending on where you launch, you could basically. cross over Earth multiple times a day, every point on Earth twice a day.

So the most common launch is called Sun Synchronous, and it basically means you're orbiting the Earth, but slightly rotating as you do it, so you go over everywhere, which is pretty useful if you think about the application. As I go over the Earth, I'm either transmitting down or I'm pulling stuff up, or I'm observing what's happening on Earth. I actually might be observing what's happening in space, but let's focus on Earth for now. So I need a way to power the camera or power my radar. Power, I presume, it has to be solar, right? Because you couldn't have a long-term solution other than solar power. Is that right? Yes. So think of it like you have solar panels. They charge a battery and then the

battery provides power because when you're orbiting Earth, you spend 45 minutes in the sun, right? And then you spend 45 minutes where the Earth is blocking the sun. So you still need to provide power, even when you're in the shadow, but you also need power when you're in the sun. So the battery helps fill that gap. And you provide that as well. That's part of what you do? Absolutely. So what the hell is the payload company doing that? The payload company is making all the money, right? So they're providing data for everything from financial firms to monitor how many cars are in the Walmart parking lot all the way to climate change, all the way to manufacturing, you know, drugs in space all the way to defense applications.

Okay, everybody, I got an amazing announcement. I'm doing a jam session with J-Cal on this very podcast. You're going to get to join me on air on this week in startups. You can apply, and there's only a couple of rules here. You've got to have less than $2 million in funding, so we want early-stage startups, and you've got to have an awesome.com.combe domain name. If you've got those two things, you can apply to come on air here and do a jam session with J-C-K-K-O-What's a jam session? You tell me about your business. I ask you questions. You tell me about

what you're struggling with. I give you answers. I give you ideas of how to solve your problems or how to grow your business. This is going to be an amazing episode coming out this summer. Go to get.com tech slash Jason. Get get. Dot t-e-h slash Jason. And remember, only two rules. You got to have a dot-tech domain name, which is an awesome domain name to have. A lot of great companies like Rabbit are using it. We're using it for Founder Fridays. And you just have to have under $2 million in funding. We're looking for early stage startups to jam out. Where did the jam session come from?

The jam session was something Travis and Chris Saka and I and other people used to do. We would just hang out and talk about our businesses 20 years ago when we're trying to make our way in the world. And now it's your chance. What is it? A jam session. Why should you care? Great advice. And you get showcased on this week in startups.

What do you do right now? You go to get. dot tech slash Jason. I have to ask it. So first of all, do you have any satellites already in space? Like, is this real or you guys just have a pipe dream to manufacture this stuff? We do. About 60 days ago, we launched our very first satellite bus platform to orbit.

This is probably a very, this is probably the proudest moment for the company where my baby, the satellite separating on a one-way trip to space. That's a real video. That's a real video provided by SpaceX. So there it goes. It floats away. It's moving really fast, right? Several kilometers per second, but obviously you can't really see anything that's relative.

So it springs off and it begins transmitting. And then a few days later, we actually trimmed on the payloads. So on this first mission, we had a few different customer payloads. The payload I was most excited about was our own payload, which is a selfie camera. And you could see the tweet that we pulled up where we downloaded the selfie taken from the satellite. You could see Earth in the background. And that's actually, can you describe what I'm looking at that's not the Earth, but obviously part of your satellite? Absolutely. So the way the satellite works is you have solar panels that deploy. So what you're looking at is the back of a solar panel that's deployed. The strut that's sticking up keeps it steady. And then on the back of the solar panel, you could see the American flag, our logo. And then what's actually pretty cool, most people don't realize this, the bottom left. It's a photo of our team.

on the day that we finished building the satellite. And back then, the team was less than 20 people. Look, your company was only created two years ago. Like, how hard was it to go from just starting a company to actually having a thing in space? Because you said it was three-ish million price. So I don't know what the cost, but let's assume it's, I don't know, 50, 60% of that. Plus, you have the payload. That's a lot of money and a relatively short period of time.

Like, give us some perspective on having accomplished this. So the saying in the industry of space is hard. And let me just say that saying is correct. Space is incredibly hard. There were a lot of sleepless nights and literally blood, sweat and tears to pull it off. But we did. Fundamentally, right? Like, I love space.

Max loves space. We all, everyone in the company loves space. But we're not starting a company because we love space. We're starting a company because we see a phenomenal opportunity to open up and democratize access to space. But give us some sense of the magnitude of how difficult it was to launch. What was it from when you said, okay, I mean, forget like company formation and what is our strategy and raising money, but you're like, okay, we have some money.

Start the clock to actually getting something launch in space and how impressive is that relative to what other people take? So the number one thing that we focused on was how quickly could we get the satellite into orbit. So that was our North Star. historically, we talked to a lot of experts and they said, you should estimate about three years and about $50 million to get your first satellite to orbit. We did it in 12 months, and we ended up spending well under $10 million to get that first satellite to orbit.

That was hard. Yeah. So I imagine it's not something I could have done. So hats off to you. But so under $10 million implies that you raised money. So let's talk a little bit about venture capital. Who did you raise from? When did you raise it?

What's publicly available? Yes. So I was fortunate after Palantir, I spent about a year and a half exploring this idea at a venture capital firm called Village Global, who invested in my last company. So they were the very first check-in. They kind of believed in it from the beginning as our precede. We immediately then raised our seed round in September of 22. And that's really when the company started.

And that was led by Andreessen Horwitz. So we'd been talking to them for a while about this concept. Everything Mark, you said about how space had this Cambrian explosion and everything is changing, they believe wholeheartedly. And they wanted to put their money where their mouth was and invest in us. So we're very fortunate. We made great progress. And then about nine months later in June, we raised our Series A.

And that was co-led by Andresen Horowitz as well as Shield Capital. and we've been off to the races ever since. And I will say fundraising is never easy, but we don't like to celebrate fundraising, right? We like to celebrate our core milestones of what we've done with the company. And I think that mindset has been something that everyone in the company is really embodied. So the question I get the most about space, because we've been investing in space companies, we're very interested in the category. The question I get the most asked by my investors is about capex.

They're like, can you really back space-related company? Surely, that's going to take a lot of capital expenditure. Give us some sense of that, and why should anyone give you money? So it's a great question. The nice thing about satellites and satellite buses are we are able to make money on every satellite that we sell. So there's actually positive unit economics tied into all of them. And what we're able to do is we work with our customers and we try to be very, very transparent. and we say, look, here's what we're charging you for the satellite bus.

We need to go pay for this percentage of that dollar amount. You've already said it's $3.5 million, okay? So somewhere between $1 to $2 million must be the material in labor. Precisely. So I don't need to pinpoint that exact number. But let's say somewhere between one to two and let's say you want to produce 10 in a year. You know, you're talking about $10 to $20 million just in low volume. in materials.

So that's what I mean by CAPEX, right? Like a traditional software company raises money, but then it launches its software at 80, 90% gross margin. How do people get comfortable with the CAPEX requirement? Because surely you're going to need $500 million if you continue to scale. It comes down to really having our customers early, right? So we're not just building this and hoping they come. Like, we have met the customers.

We know they're going to pay us. and then working with our customers to get paid by them early. So prepayments, milestone-based payments, and then, of course, final delivery payments as well. But what that means is, from our perspective, on the cash flow side, before we spend money with the supplier, we're making sure we bring money in from our customers. And we're very upfront about this, right? Because we want our customers to trust that we're going to be around for a very long time and be their supplier long term.

So it ends up being very mutually beneficial to make sure that cash flow does not become burdensome. It seems like having launched and proven that you could launch a satellite was an important way to then go to customers who would then do prepayments. Because if you're going to do a prepayment or milestone-based payment, but you aren't sure it's actually going to work versus being able to demonstrate. Is that why you did it? Is that partially why you did it? I like to joke, the biggest hobby of everybody in the aerospace industry is to over-prosepherson. promise and under deliver. Like, people love doing that.

So what we wanted to do was instead of just saying good things, we actually wanted to put our, you know, do the work and actually launch it and prove that it worked. Now, we were very fortunate to have some customers, pay us to be on that first satellite that you saw. We also were very fortunate to have other customers

buy full satellites from us before we ever launched. That being said, everyone really wanted to see that it worked. And that proof point has then led into, you know, a lot of excitement. The other questions that I tend to get a lot from investors is they imagine space means two things. Number one, they imagine it's mostly government and military and can you really back

companies that are mostly serving government and military? Is it, is the satellite industry or is the space industry mostly government and military? There's a lot of government and military, but there's a lot more commercial. So I think what everybody forgets is how critical everyday life is dependent on satellite infrastructure and a lot of commercial satellite infrastructure that's up there. So everything from understanding how the climate is changing all the way to mapping out if you're going to go on a hike and where you're going and different trails and roads, etc. All enabled by a lot of these commercial satellite operators. Now, of course, the government is going to be a major customer as well. But I think everybody forgets the day-to-day life is really enabled by a lot of these commercial operators.

The stats that I have, they might be different than what you have, is that it's about 77% commercial, 23% military. Dual use has been the history of the venture capital industry. It drove the chip industry. It drove the PC industry. It drove a lot of the software industry. So I think a lot of people forget how important dual use is. and government can be an important source of innovation and capital at the same time you're developing commercial use cases. But aren't you just competing against SpaceX?

So, SpaceX, we see as a major enabler of us, right? They obviously launch and they're putting satellites up. They also run their own constellation, which is something like Starlink, but that is fundamentally different than being a bus vendor. Now, we might have customers who buy a satellite bus and want to provide internet connectivity, and they've carved out a niche use case that's different than Starlink and that's great for them. But we're playing it, we're all playing in the same ballgame of let's put something in space, but we're playing at different positions, right? And it's very collaborative. In a way, I would just say, I think Starlink is probably driving your market. And the reason I say that is, like, the minute cost get reduced,

new use cases always come about. This is true in any technology market, right? So the things that you can't imagine until things are cheaper. So the fact that Starlink exists created a market for communications on boats or in remote locations where they were cost prohibitive before. And the minute that you do that, suddenly you put pressure on everyone else in the industry to be able to provide cheaper satellites, cheaper communication. So they're going to need low-cost bus manufacturers. They're going to need low-cost satellite if they're going to compete with SpaceX. In many ways, I think it should drive the market. That's, exactly how we see it. And it's happening. How big is the satellite market today? Like, I don't

have that data. Yeah. So right now, if you look at just what people are spending on just buses, so not overall satellite markets in the trillions because you're looking at all of the applications, but just what we do on buying satellite buses. So excluding people who build them themselves, you're looking at well over $30 billion per year and annual spend. Pretty big market. Yes. So what I would say, say is we can't talk about most of our customers, but we can talk about some. One, the most recent one we just announced is a company called Booz Allen Hamilton. So they're a very large defense prime. Another company that we've been able to announce is a smaller company called

Ubotica. They make edge compute systems for space. And that's a great example of one defense, one commercial, and, you know, they're working very synergistically together. They're both on the very first satellite that's currently on orbit. And it's amazing. it's what you said. It's the dual-use side where, you know, government might push something forward, and then the commercial takes that and finds all these great business bottles on top of it, they keep building off each other. To give people some scale, historically, there was about 30 satellites launched into geospatial orbit per year, 30 per year. Geospatial orbit is about 10 to 15 per year right now. So like these really big expensive systems built by the Northrop Truman and Boeing and other

big primes. It was really a small market, incredibly expensive, hugely valuable. I think the entire industry is being disrupted in, you know, kind of a Moore's loss sort of way, you know, driving down costs, increasing performance, increasing the type of stuff that's going to space. Our imagination today is really things like comm. So it's like cell phone communication. You're used to satellite phones, data transfer, internet. It's things like Earth observation. Earth observation, is it's critical. It's like knowing where the Houthis are attacking boats coming around the Red Sea, turns out it actually matters or monitoring the Straits of Malacca near Singapore or the width of the Panama Canal. Like we know all of this stuff matters. It matters to hedge funds. It

matters to oil companies. It matters to government. Also, if you look at the recent war where Iran, for the first time in history, directly tried to attack Israel, you know, they had these exomagnetic defense systems that were able to shoot down the missiles before they entered Earth atmosphere. And so you think about military capabilities will increasingly require sophistication in space. So I imagine governments are going to increase this. So given all of this, people then can't imagine what's coming next. Now, I know some of the other use cases. I was hoping you might be able to talk about some of them.

If you're knowledgeable, if not, we won't spend any time on it. But I know there's companies like Varda, which are looking at doing pharmaceutical manufacturing in space and a zero gravity environment. I know that there are companies like Astroforge, I think, which is looking to mine asteroids and bring materials back to the, like talk a little bit about what does this market become? I think it really all stems from what you said earlier, which is as cost goes down and frequency goes up, more and more business models begin to make sense. So you have companies like the two that you just mentioned are perfect examples. If you're manufacturing drugs in space, what it really

comes down to for those pharmaceuticals is, well, what's the cost versus what's somebody willing to pay and what are the benefits? And they've realized that in zero gravity, you have different crystallization of certain pharmaceuticals that make them much more effective. And if they're more effective, well, insurance companies will pay a lot more for that because it'll help a lot more people and save a lot of lives. So that is something that, frankly, five years ago, that business model didn't make any sense. Today, because the costs have come way down, that business model makes a whole lot of sense. And we're only going to see more and more go in that direction. Another great example is for every electronic device in the world, rare earth metals, things like platinum,

are key to enabling them. There's a finite supply on Earth. There's pretty much an unlimited supply out in the galaxy. And the idea of asteroid matter. I mean, that's been, from the dawn of science fiction, I would argue, has been a dream of everybody. But the business model, frankly, never made sense until now. All of a sudden, you could get a launch to space, a lower cost satellite bus. You could actually build the mining tool, send it back to Earth, all for something that is less than the price of mining platinum here on Earth. So fundamentally, like, these are just two examples of what I think are some of the coolest

business models that I have seen. we are at the brink of so many more of these ideas beginning to emerge. And what I think a lot of people don't know is that a lot of these rare earth metals are not easily available to Western countries. Like a lot of them happen to be in China and happen to be in Russia. And so I know that there's a big initiative from the United States, from Western Europe, to see whether or not you can start to mine some of this from space. one of the areas that I know is kind of a little futuristic, but maybe we could give a taste

to people is this area of cis lunar orbits and the idea that increasingly you might have satellites around the moon, you might have things orbiting the moon. Why would this exist? Why does it matter? Because I imagine it could be a future market for you. Well, I'll turn it back, Mark, with a question for you. If you could go live on Mars or at least take a vacation to Mars, would you? No. Really? Okay. I know I know I'm supposed to say, yes, I'm on T-E-MER. I was trying to tee you up for a yes, but we'll take it. We'll take it.

Sorry, I'm on T-M-Rithetically, let's say you want it to go take just a short vacation to Mars. To get there, right, you can either try to go entirely from Earth and go all the way there to Venus or wherever you might want to go. Realistically, what makes a lot more sense is to have a layover, right? And you have a layover at somewhere nearby where you get out of Earth's gravitational pull and you're able to refuel and go somewhere else. Turns out the moon is a really good spot for a lot of those things.

The moon also has some amazing resources like helium-3, which some startups are thinking about mining. It also might be a place where humans one day might want to set up shop and do certain things or et cetera. To enable all of that, though, we need infrastructure not just on the moon, but around the moon. That means think of every satellite we have over Earth, who's monitoring the Earth, monitoring what's coming near the Earth, providing communication. to the Earth, all of those things, you effectively need to replicate them out near the moon as well. And that's considered cis lunar. So down the line, we're seeing increased right now, it's a lot of people talking about it and starting to take action there. And that's something where I would love to see our satellite buses and SpaceX's rockets and this entire market

evolving beyond just Earth, but to the moon, to Mars and beyond that to enable all of those things. As someone who lives in Los Angeles, because, you know, they always, say that the future is already here. It's just unevenly distributed, right? I always say this to like my family who doesn't work in the tech sector. Like the stuff that's coming in just three to five years is really mind boggling. So living in LA, I'm seeing a lot more companies developing vehicles for driving on the moon, lunar vehicles. I'm seeing companies that are trying to do robotics that can both work on the space station but also work on the moon. And so they're having to design on Earth, a simulated environment of what does it look like and feel like on the moon to

drive around to prove whether or not your equipment works. I think we are gearing up for a lot more to be happening in and around the moon, both extracting materials. And eventually, like, so what is explained to me is that because the moon has less gravitational force, it actually becomes a great refueling area. So you can take a rocket to the moon. You can then refuel and then launch from the moon to go somewhere else further out into space for mining purposes or for your vacation to Mars while I'm in the south of France. And I think it's nearer than people think.

And I think it's a really exciting opportunity. I think a lot of great startups are going to be created to take advantage of these kind of opportunities. you today, you've launched one satellite. You have a satellite. You've launched the full satellite, but you produce your bus. So I presume you've now got a standard process for how you build the bus.

Maybe you could talk about what the throughput could be. Like, how many of these could you build? And I understand maybe you have a little video that could show us what your current facility looks like. Look, we started in Los Angeles in a small facility in Culver City. which is, I would argue, the heart of LA. And that facility is phenomenal, and it lets us build basically one satellite bus at a time. So we kind of peek out there at about 10 satellites per year.

The facility that you're seeing right now is in Playa Vista, about 10 minutes away from our current facility. And that will let us scale to building well over 150 vehicles per year at its peak. So we're just beginning to move in there now. But part of the reason for, you know, look, we've only been around 18 months, we're already new moving into our new facility is the demand that we're seeing because of the reduction in launch costs, the new business models that are coming together for more and more satellites going to orbit is enormous. And now we need to go produce those products to deliver to those customers. That's a pretty massive improvement in terms of the cadence of

ability to manufacture buses from what you said in the past. So I really hope for your sake, I hope for the industry's sake that your thesis is correct, that by standardizing the bus, lowering the cost, increasing the cadence, we as an industry, we as a country, we as the technology ecosystem can start doing a lot more launches, getting a lot more into space at a lower cost, because I think it will then spur software companies. Because once you have the hardware out there, now you can design and develop more software. And as I understand, I've spoken with Booz Allen in the past. I know part of what they want to do is develop software in space.

And so once the hardware exists, then you see application layer stuff. And I think that's really going to be part of our future. And I hope to see more of that in the years ahead. You today, you do about 250 kilograms is what you can support. So the satellite bus platform itself is about 100 kilograms and can support another 150 kilograms of payload, cameras, sensors, whatever you may want. And then we go up in size from there. So that's like, I don't know, I can't do the math.

Is that like 220 pounds or something like that? For the satellite bus itself, yes. And then for once you attach everything to it, and you think four or five hundred pounds. I understand that your future is to develop bigger buses. And maybe you could talk about that. Why would you produce them? How big would they be? When are those available?

So, the way that people monitor the cost of launch, it's dollars per kilogram to orbit. And when we talk about the cost to get to orbit going down, it's really, you know, the cost per kilogram going far down. The result of that is that trend's continuing, which means that people are now able to launch better and better payloads, and a better payload usually means it's heavier, it's physically bigger, et cetera. So we're now working on our new platforms called Nova and Comet, which you could see here, that are double the size of Ares and then quadruple for comet the size of Ares.

So we're seeing the market demand where people say, well, costs have gone down. Let me launch something bigger. And we're meeting that market demand. And I guess what we're seeing here on the screen, you are able to be launched into Leo, GEO, SISLUNR, if asked to. You're able to launch not only on we can see Falcon 9 here, but any of these other platforms. So you're kind of agnostic to how you get up, but it seems like most

launches are on Falcon 9. Is that right? That's right. So commercial launches are almost all Falcon 9. Government launches, they try to diversify a little bit. So we're seeing a few more providers. And it's important to be, we don't like vendor lock in. We want everything to be as standardized as possible. Let's talk about your company. How big is it today? How many people are you growing staff? Are you hiring? What kind of people are you hiring who should reach out to you? How should they reach out to you. We're approaching 50 people right now. We are actively hiring. We have a bunch of job wrecks on the website. Mark, you're very knowledgeable about the space. If you want a job, you know, we're in L.A. So come on by. We'd love to hire you. So yeah, we're actively hiring for

all roles, everything from engineering to BD to finance, etc. To venture capitalists. To venture capitalists. Exactly. Help us raise more money, Mark. So you're hiring. You'll grow to how many people did you say? So at the end of this year, we're looking at approaching 100. Okay, so you're going to double. Yes. It's all sorts of people, business people, marketing people, finance people, but I assume a lot of like engineers and people designing manufacturing and a lot.

The majority is on the engineering and the production side. So engineers will design the vehicles and then the production team says, how do we build them at scale? And then of course, we get some people on the BD and the G&A side to help sell more of the vehicles and keep the company running. you have a website or how would people apply for jobs? Yes. So go on our website.

It's Apex, A-P-E-X-S-P-A-C-E-E-D-C-E dot com. You could see all the open job wrecks that we have there, learn a little bit of more about the company. And one plug that I'll put in as part of that is if you go on our website, you could actually configure your satellite bus online, which is very new for this industry. So you could pick the one that you want. You could reserve it with a credit card. So, Mark, if you're ready to buy your satellite today, go on. let's do it. But it really democratizes access, which again is one of the core tenets of what we're

trying to do here. I guess one of the things you'll do at some point is raise more venture capital. How much capital does a company like this ultimately require? So one of the things that I'm proudest about our company is like we do have a sometimes a maniacal focus on unit economics. And we say, we're not just building something as a science project, we're building something because there's a real fundamental business. So we're in a very healthy financial position where, you know, we're able to make money on satellites that we sell, reinvest that into the company and to keep growing. Down the line, as we see demand to go, you know, beyond 100 satellites a year into much larger quantities, we'll want to bring on more

capital to just move faster and scale. But, you know, at the time right now, it's, we're very fortunate to be in a position where we don't need to be looking for investors, but we are looking to hire people. The easy math for me that I can do in my head, you said it was three and a half million dollars per the price tag. So you sell 10 of them. There's 35 million. You send a hundred of them, let me assume some price reduction to 300 million dollar market. So if there's a market for 100 plus of these, and it sounds like there is, like you could be doing hundreds of millions of revenue, you've got to make sure you have the margins. Let's talk about competition before we wrap. Like who else is out here gunning for you?

So what's so interesting is the traditional satellite bus manufacturers out there, right? You mention them, the Northropes, the Lockheeds, et cetera. They all make satellite buses. They're competing on a lot of the same contracts that we compete on. However, many of the people that are buying the satellite buses from them are frustrated by the speed, the lack of cost transparency, etc. So often what we're seeing is the people who would traditionally be our competitors are now becoming our collaborators. We are a pure play satellite bus platform vendor, meaning we are happy to supply to any of the companies who are serving those end customers. And we end up becoming an enabler for them.

So it's a little interesting where you have a market where you're both competing, but then also collaborating with the same entities. And that's really who we see ourselves coming up against. There's some other amazing companies out there who have laid a great foundation in this industry and are doing well, but we see it as a massive market with, you know, room for more than one. From what I understand right now, standardized bus manufacturing for Leo, you're the main player that's gearing up to do that. And if you're right about the market, should capture, I think, good market share. There's other people focused on Mio right now. And, you know,

whether that becomes a more important market or the same importance, I think history will tell us in the future. But that's kind of the real difference I've seen as other people focus on Mio while you're focused on Leo. Ian, I'm thrilled that Apex Space is based in Los Angeles. I'm excited for all the opportunity that we all have in this great city. I have said to people a lot publicly and privately. Los Angeles had such a big moment from 2015 to maybe 2020. And it felt like in COVID, we kind of went into a cocoon as a city. And I think the reason is that the energy in COVID seemed to go to crypto.

And crypto seemed to gravitate towards New York, maybe San Francisco. but a lot of New York and Miami. And the energy I see right now in hard tech and in space in Los Angeles is something I haven't seen in this city for 10 years. The amount of people moving here, creating new companies, capital going into the system. I think it's a really exciting time. I'm thrilled that you're a part of it. Your Twitter handle so we can plug you if people want to follow your journey is.

My name, Ian Cinnamon, so it's easy to remember. Ian Cinnamon, such a unique, memorable name. My handle is M. Suster at M.S.U.S.T.E.R. And I am a partner at Upfront Ventures, a L.A.-based venture capital firm. So anyway, thank you so much, Ian, for telling us more about Apex Space and about the space market overall. Thank you, Mark. Great to be here.