How To Build a Business On Hosted Payloads And Space Expertise?

Andrey Maksimov: We are continuing our conversations with great companies about big products in the industry. That’s another take from the Logan, Utah SmallSat show 2019. With me today is Doug Liddle from the In-Space Missions company based in the United Kingdom. We’re gonna talk about an alternative way to test your payloads in orbit and hopefully do it on a very good time scale and within the budget. So, Doug, could you tell us a little bit about yourself, where you come from, and then we can discuss the business. 

Doug Liddle: Okay, I’m British. I’ve been in the space sector since 1994, initially in military space, working with the UK government and military defense. And then I moved to Surrey Satellites, who is a world leader in manufacturing small satellites. I joined them in 2001 initially as a systems engineer and then as time went on as the lead engineer on the GIOVE project, which is Europe’s first Galileo demonstrator, developed a small geostationary telecommunications platform. Then I took a bit of a turn, started getting about in science and exploration, small satellites, devised the STRaND-1 mission, which was the UK’s first CubeSat. 

AM: When was that?

DL: So STRaND-1 was…I’m gonna get it wrong… 2014 or 2015. So we put that up, a very exciting mission. And then also, in a similar time period, I was doing TechDemoSat-1, which was one of the UK’s technology demonstration hosted payload missions, which was funded by the UK government at the time. We saw the potential in that, putting multiple payloads onto one satellite and benefits you could get from doing that and offering a lot of people a ride at a low cost.  

AM: Multiple meaning different payloads from different institutions, different purposes…

DL: Different payloads from different institutions, customers, different purposes, doing different things in space. Then in 2015, I decided to leave Surrey Satellites just for a new challenge really. So I set up my own company, of which I’m now a co-owner. We were only offering initially consultancy to the government or institutional guys, but then we moved on: we realized we missed building spacecraft because in the past we had built a lot of spacecraft. 

AM: So you started as a consulting agency helping others to deliver mission success. 

DL: Initially, we were talking to a lot of small companies and startups too who had fantastic ideas for missions, but hadn’t necessarily built spacecraft before. So we were able to come in and say: ‘I know this and this and this will help’ and offer different levels of advice. But then we started building our own spacecraft and we devised the Faraday 1 service. So Faraday 1 is the first satellite we built. We’ve got seven payloads from seven different customers. But this time instead of using government money it was all about using commercial money. People pay us money, we put them on the spacecraft and we launch them. And then enough people join us on the mission, then the mission covers its costs commercially.

AM: And you have some profit.

DL: And we have some profit. Actually, we aren’t really into profit after about six months, which is interesting. We rely on the fact that people will want to carry on using the space service once they’ve been up for six months. So, when we sell a ticket to fly with us, you get all the support, you then bring your payload alone, we integrate it, we test it, we do the licensing, …the free stuff. We have that third party liability insurance, we do the launch, we then operate you for six months. After six months, if you want me to turn the payload off, then that’s fine. That’s what you got by buying a ticket to fly with us. But, if you want to keep using the spacecraft, because maybe you’ve initiated your service, and, actually, people are buying your service. And you want to keep using that while you’re launching your next maybe 20 spacecraft. You can use our spacecraft still. You pay us and you keep using our spacecraft, and it kind of becomes satellite zero in your constellation. 

AM: We call it MVP, minimum viable products.

DL: Might not be an MVP, it might be the same thing that you might build more of. But whatever, it’s stimulated that market and it’s allowed you to then go out, raise the funding, create a service, a constellation, and make a lot of money. 

AM: But does it mean that your ideal customer would not be those customers that want to just turn on their satellites, take a few images with their camera and then they’re done.

DL: No, you need a good mix. So, we like the guys who want to hang up for just these six months, and that’s great, because they’ve got a very clear vision, they need to get an image, to qualify there, they need to do a short duration test, whatever. By turning off after six months we get more spacecraft capacity to support the other guys. So, our ideal situation is probably half the people want to keep going after six months, and half the people are done.

AM: So if they decide to shut down, you keep their rights to use their payload. 

DL: It’s their payload, it’s completely owned by them, they keep the rights to use that payload. 

AM: If you find a customer for their data then?

DL: Then we will talk to the payload provider and say ‘Hey, these guys want your data. What do you want to do?’

AM: Do you really want to switch it off or not?

DL: Exactly. 

AM: Very good. So why would a young startup from Utah or abroad decide to work with you guys instead of building their own satellite and launching it?

DL: So, a lot of it is around cost and schedule. By sharing a spacecraft you are getting something that’s gonna be about 20% as much. To be able to share a spacecraft you use that money to build your own spacecraft. I’ll work that for you in a minute, but you probably get 80% or 90% of getting your own spacecraft and you will be able to turn on your payload. As an example, say, you have a 1 kg payload, you can fly that with us for something between one hundred and two hundred thousand dollars, and it’ll get you six months in orbit. You compare trying to get 1-kilo payload into orbit on your own. You are gonna need a free-flying bus. You are gonna have to develop a bus yourself from scratch or buy that from somebody. That’s gonna take you back on the period. You are then going to do all the licensing yourself, all the leverage yourself, you’re gonna have to buy a launch, you’re gonna sort out operations… Easily half a million. Easily.

AM: So, unless that was the initial goal to go through that, it’s an added cost. 

DL: And some people want to learn how to develop a spacecraft, which is fine. In which case, we are not for them. Well, we are, but it’s not the Faraday service. We work with them to help them develop a spacecraft. 

AM: Because you still retain that consulting…

DL: That’s not the Faraday service, because they want their own free-flying spacecraft. But if they want something that will take twenty percent off the cost, then they can talk to us. 

AM: Yeah, why not. Twenty percent sounds like a deal to me. 

DL: And the schedule is good. We are trying as much as possible to reuse existing avionics where we can. We are able to turn things around at the moment. We’ve done research recently that demonstrated that having a spacecraft ready to launch we’ve managed to sign our latest contract 4 months before launch. The thing is that the long part of the schedule is actually the regulatory base, getting all the licensing, but the actual physical building…

AM:  And you take care of that as well, right?

DL: And we take care of them, so that’s fine. And we have a very well-structured approach to the regulatory environment.

AM: Sounds a little bit fishy to me, what’s in downsize? Something could be wrong here, should be wrong!

DL: The downside is that you’re gonna have compromises. So, for instance, if you have a payload, which is to broadcast 24/7 and needs to be transmitting all the time very loudly from the spacecraft, there are some other payloads on the spacecraft that are not gonna be compatible with it. 

AM: So you have to be qualified for that particular instance of selling the mission?

DL: Yeah. And we try to match-make. We try to make sure we’ve got the right mix of payloads. So there might be you cannot turn it on over Brazil, because we have a customer that always wants to listen if the payload is over Brazil. And we would have a discussion with you and say ‘Can you live with that?’ And it might turn out, actually, that you can listen in the daytime, but not the nighttime when you go over.

AM: I don’t see also how to match-make them for the same inclination as well. It starts with the same inclination and then you have to match-make between what these small payloads do together. 

DL: But most payloads we try to base on Sun-synchronous orbit. Because if most payloads work with that, it simplifies powering them, designing the spacecraft, it opens up a lot more launches for us. So, Sun-synchronous is good. Saying that we never went to sun-synchronous in our missions, but we would target that. Then we try to get it right to make sure the node is good. Some people don’t want to be on the terminator, there are various reasons: it might be the lighting conditions, it might be ionospheric conditions. You know, there are reasons.  So we work through that with the customers and we try to find the right fit for them. 

AM: But you can next stick communication payloads and observation payloads on one platform. 

DL: Those are perfect. So, once they are optically imaging and once they are using our… they are favorites because we put them together and the costs come higher. That’s easy.

AM: I can imagine that timing may be an issue. So, you have to wait until the whole bus is filled with customers?

DL: Right. That was certainly true with the first satellite. But now we’re getting into a situation where we are getting several a year, so there is always another bus coming. So, next year we’re planning to launch five, the following year we’re expecting to have even more…

AM: Five payloads or five missions?

DL: Five missions.

AM: Wow! 

DL: So, five satellites.

AM: And each satellite will have a couple of payloads on it?  

DL: Absolutely.

AM: Wow! Why didn’t you call yourself like ‘Next Constellation’ or ‘Mega Constellation’? Why not? You have everything that usually describes a constellation. 

DL: But also our appetite isn’t to be a mass-producer of satellites. So, we still rely on that. On our first spacecraft, we used avionics from GomSpace, which are a great set of avionics. They have been approved by ESA, we know they are good reliable avionics. We’ve got no desire to start building our own onboard computers. Now, if we’re gonna start building a constellation, we really need low-cost supplies of these pieces of kit.

AM: Right. So, there’s different, I would say, cost structure. 

DL: We will do four of five satellites, maybe a few more, but fundamentally we’re not gonna start building our own computers, our own power systems, we like to work with people that do that. And we integrate it, we test it, we tune it for the right payloads, so we just don’t want to hand it over to somebody else, but we will buy those subsystems and we will turn them into a spacecraft. 

AM: So when are you guys planning to make your first launch?

DL: Our first launch should have been about now, but a few production delays, so Rocket Lab’s pushed us out to December. These things happen. So, we’ll be launching December this year, which is our first commercial launch test. And then we’ve got another five next year, which is gonna be really exciting. Just quickly to come back to the… What I was gonna say was we also like doing demonstration programs, we want to hand customers on to somebody who is a manufacturer.  So, we can easily see a situation where Gom or Clyde or any of these guys, we basically get to the end of working for a customer, and then we introduce them and say ‘Hi, these are the guys that are gonna build your 200 satellites. It’s not us.’

AM: Why are you willing to handle off this great client of yours to other satellite manufacturers?

DL: We like to do fun and exciting stuff. We’re old guys now. And we find this is where the challenge is. This is a place in the market where we don’t really see much competition. So, people that have got a lot of experience, that know how to make different very complicated payloads work with each other. This isn’t a simple thing to do. This is a real challenge. 

AM: So, basically, you’re providing like a fast-track to tech demo missions. A fast track to understanding whether they are willing to do in their business model is actually viable or not.

DL: Absolutely. And we don’t see competition in that part of the market. If we were to become a satellite manufacturer… And we’ve done this. We worked at Surrey Satellites. Most of the team were Surrey guys. That market is already choked with really good manufacturers. All of them are ready to build 200 spacecraft. We don’t think we can add anything to that. Effectively, most of the guys at the company have twenty years of experience and thirty missions under their belt and they can bring that experience to bear on some really difficult problems. 

AM: And how big is your team now? 

DL: So we are only seven. 

AM: Only seven! Wow! 

DL: And this is another thing. This is why we annoy some of our friends. We don’t see the need for some big primes anymore. And we work by collaborating. For instance, the team that delivers our software isn’t in-house. It’s a company called Bright Ascension, who we really like, we work with really well. They do fantastic work and their work as an extension of us, and vice versa, we work together on quite a few things. So, it’s a really nice situation, where you can put together a few small companies and create the capability of a prime, but don’t have to carry a standing army, because there’s always the danger. I’ve seen this in previous companies. You hire thirty people to run your mechanical designer team, and then suddenly you are not doing a mechanical design project. So what do you do? Do you fire these people? You start inventing work for them to do. We don’t want to be that kind of company. 

AM: Especially in such a volatile situation in the market.

DL: Exactly. The market is like this, and we want to be able to occupy our niche and keep the capability we have, and we slowly are growing it. We expect that by the end of next year we’ll be about twenty. We may grow bigger, but we are not sure. 

AM: I heard that the UK government claims that they want to have a 10% share of the global space industry by 2030, is that right?

DL: Yes! We have these big visions in the UK. And the UK government has been very good at supporting us in the UK, so we are very pleased. 

AM: And where are you based?

DL: So, we’re based in a place that nobody’s ever heard of. It’s called Bordon, it’s halfway between Guildford where SSTL are and Portsmouth where Airbus is, which is good because we’re just halfway… It’s a nice place. We have little bits of military space near us. Airbus has interesting stuff nearby, the Skynet constellation. These are the UK’s military satcoms. 

AM: Thank you very much! It’s been a lovely conversation. Wish you all the success on your first mission and more and more missions next year.