You Don’t Have To Be A Billionaire To Launch Satellites

Last year, the team at Astranis launched their first commercial satellite into space. Stage separation confirmed. [Music] [Applause] Their smaller, low-cost telecom satellites represent a major breakthrough for the aerospace industry, and they're also the first ever startup company to actually launch something into space.

All of this had its beginning here, in a small apartment in downtown San Francisco. When I met you 8 years ago, you were just a guy who had an idea to build a satellite company. Now you're a guy who's actually built a satellite company. Yes, that is true. It was just me and Ryan, just hanging out in an apartment. Turns out, the minimum viable product for a geostationary telecommunication spacecraft is not very minimal.

So how does a small, scrappy startup go from building satellites in a tiny apartment to launching satellites into space and being worth billions? We went to Astron to find out. YC has funded some of the most successful hard tech companies of the last decade. I think there's a misconception that in order to start a hard tech company, maybe you have to be already a billionaire like Musk or Palmer Lucky, or you need to be able to raise tons of money from investors. YC only invests $500,000. It's not obvious to a lot of people how you could use that to start a hard tech company. It is mind-boggling how a company like Astranis that went through the batch made progress during the batch. Like, what can you do with so little when satellites cost millions of dollars to ship?

So we visited the co-founders of Astranis to find out how they pulled it off. So John, you built a satellite company. That's insane! You're accustomed to this because you live in it every day, but to me, it's still insane that you actually did this. So let's start with the basics: what is Astranis?

At Astranis, we build a special new kind of satellite that actually we think is the first of its kind. We build small satellites for high orbits. What's the path that took you here? How did you learn how to start a satellite company? I'm an aerospace engineer by background. I did that job for a little while, spent a little bit of time on some big satellite programs, and just knew that that was not for me. Then, there was a moment where we realized, hey, nobody is going and taking a new approach using new technology and next-generation satellite designs for high orbits—specifically, this super valuable orbit called geostationary orbit.

So, it seemed worth taking a crack at. How did you end up recruiting Ryan and turning this from an idea into a startup? Ryan and I met over 20 years ago. We were both involved in this student organization called Students for the Exploration and Development of Space. We got to know each other through that and then reconnected when he moved to San Francisco to start a job at a company called Planet, which is one of the pioneering space startups.

100%. Once he moved to San Francisco, we started talking about, you know, basically ideas for new space companies. So you guys did kind of have the exact right background to do this because you've been working with all the biggest companies in space, understanding the business problems. He was an early engineer at the key early startup that pioneered the idea that startups could build their own satellites. So it makes sense.

Yeah, I think it was definitely like a little bit of right place at the right time. So you had this idea, you recruited Ryan; you guys decided to work on this together. How did this become a startup? How did you take the first steps?

Applying to YC was one of the first steps. Astranis did YC in Winter '16, and Winter 2016 was a very special time to be starting an aerospace company. It was at the very beginning of when other founders, inspired in part by Elon Musk and the success of SpaceX, started starting their own aerospace companies. It was right on the cutting edge, so it wasn't clear that it was possible for a YC-style company that didn't have a billionaire founder to actually start an aerospace company. But it turns out that it was exactly the right time to do it. In fact, in 2016, YC funded three aerospace-based companies: Astranis, Boom, and Relativity Space, that are now all billion-dollar companies.

John and Ryan got into YC, but they knew that they were facing long odds of being able to raise the large round at the end of YC that they needed to put a satellite into orbit. They responded by setting crazy ambitious goals for what they could accomplish during the batch so that they knew that if they could accomplish those goals, it would be impossible for investors to ignore them.

How did you get started? I mean, what was kind of the day zero of it? So, I guess one of the key things, especially with building these hard tech things and things that have to go, you know, something really far away in a very harsh environment, was figuring out how can you start small—like minimum viable product and all that sort of stuff.

Turns out, the minimum viable product for a geostationary telecommunication spacecraft is not very minimal. One of the things we decided we wanted to do from the earliest days was just draw a line in the sand and say we, as a company, are going to put something in space and show that we can build a satellite and that it will work in space. Let's just figure out how to do that and do it at the lowest possible cost, prove out maybe some early prototypes of some of the new technology that we wanted to be using.

When we joined YC, we had a meeting. I don’t know if you remember this, but we had a meeting with you and our other YC partner that was basically like, okay, you have three months until you can show up on demo day, and whatever you have on demo day, it better be as impressive as possible. Anything that doesn't get done until after demo day—forget about it! It won't matter, the investors won't hear about it because it won't have happened yet. So what are you going to get done in three months?

We said we think we can build a first prototype satellite in three months. Kind of a lot of work, and actually, it could take some companies years. But we said, okay, we're going to do this in three months. So how can we show proof points, both to external people but also to ourselves, to prove out that we have the abilities to show things?

In those three months, we built that prototype version and then built the version that we then launched and were able to operate in 2018. How did you do that? Because you were building this in the apartment, right? You know, a lot of the sort of core elements are fundamentally kind of simple, and if you're really building this as a demo rather than for a production application, you can be flexible on what the requirements are and things like that.

Knowing that this demo satellite was really just building something that's fairly basic just to prove out, can we build something? Can we integrate it? Can we deploy it to an operational environment? Can we do some sort of basic demo with it? We were able to do that relatively quickly. We built this first prototype satellite, and we brought it to demo day.

It was such a smashing success that your demo day video is one of the ones that we continue to play for founders in new batches because it so perfectly encapsulates what a startup can do in three months if they're really ambitious and really hardworking and really determined to do something that other people might think is impossible.

We are attacking a $122 billion a year market with low-cost satellites. Please come talk to us if you want to find out how much money you can make in space. Thank you.

When we do our onboarding, actually, part of what we show is we show John's YC pitch. It’s always funny looking back at that and being like, well, yeah, that’s like kind of fundamentally the same thing that we said, you know, way back then when it was just two of us, not that many months into starting the company.

So, I love the Astranis demo day presentation for a couple reasons. The first is it addresses the number one reason why anybody would not want to invest in Astranis, which is it seems impossible. They address that by showing that they've already done it. The second is it addresses the other reason that people wouldn't want to invest in Astranis, which is that it kind of seems like it could be a science project and not really a good business. Investors want to fund stuff they can actually make money on.

John does a really good job of conveying to the listener that this isn't a science project; this is a real business that could be very profitable. So, John had practiced 50 times over three days and got different feedback, and it paid off. They raised one of the largest seed rounds at YC ever at that time, and that seed round was enough for them to actually launch a satellite into space.

But they still had to be scrappy because space is expensive. Coming out of the seed that we raised at the end of demo day was when we moved into the apartment—1,800 ft. So, yeah, pretty small for all the different things. But, you know, to build a spacecraft of this size, you don't necessarily need a huge amount of infrastructure in order to do that.

We built it on, you know, Ikea desks that were fitted with all the different things and got some ESD mats and things like that. But, you know, we were able to sort of put it all together. We did want to make sure that we were clean and had the right mindset when you're doing with the space hardware.

So we actually did build a clean room. The clean room was, in fact, basically a bunch of PVC piping with shower curtains, and then we sprayed this stuff called staticide, which allegedly would basically give it a little conductive layer to make sure that the big plastic curtains aren't going to generate a bunch of static and then, you know, zap our things as they're coming into it.

They kept making progress, kept selling, and kept growing without losing that scrappy spirit. Now, 8 years later, they have more than 400 employees working out of a historic building at Pier 70 in an area that's quickly becoming a tech hub. Earlier this year, we visited their manufacturing facility while they were putting the finishing touches on four brand new satellites.

Behind this door is where the real magic happens. This is where the actual flight hardware is being built and assembled that is going to go into space. Let's go check it out! These are panels that are in different stages of being assembled into full satellites. What you can see right here is one of our most fully assembled satellites that's getting very close to being ready to go into space.

One of the things that we've been most thrilled with is just being able to bring a lot of our testing in-house. So, for example, over here, that is a vibe or a shaker table that is to simulate the ride to space on the rocket. So, when the rocket is launching, it's bumpy. We've all seen the movies. Yeah, it looks like a bumpy ride up there!

You have to test it. You have to test that your satellite can survive that. You can actually dial in pretty specifically exactly what types of vibration modes the satellite is going to see specific to the exact rocket you're flying on, and it's an important test that we do before we ship the satellites out the door.

So then, through this door is a very important piece of test equipment. These are what are called thermal vacuum chambers, where we can test the satellite at hard vacuum before it ever goes into space. They're big enough to put an entire satellite inside each one, and we have two of them, so we can do two satellites at the same time. Each of these tests is pretty significant; it can last for 7 to 10 days that the satellite is sitting there. It's on, it's got all the software running, it basically thinks it's in space.

So we figured out actually that we can do ion thruster tests inside of this chamber as well. That was also a huge win for us—discovering essentially that we could do this test in-house and use our existing facility, not having to send that to somewhere else.

So, what satellites are going to space this year? Yeah, so we are launching four satellites. These are launching together on a single rocket, one of the bigger rockets. This is the SpaceX Falcon 9. So we went and got our own dedicated Falcon 9 launch.

Oh, there's going to be a dedicated Falcon 9 launch just for Astranis? Yes! I think we were the first new companies in history to go and get an entire dedicated Falcon 9. Getting those up, getting those operational, and taking this from the beginning to the end and really getting that first thing going has been great for scaling up the design and the manufacturing side.

It has been the focus over the past couple of years. And then, you know, later this year, we're going to get used to operating. Instead of operating one, we're going to operate five. There are going to be a lot of learnings, excitement, and challenges with that, but we're looking forward to going through all of those.

But we're not just doing that; we're also developing our next generation system. There are a whole bunch of different things that are in the works between that and other new vehicles and programs. It's a balancing act.

You don't need to be Elon Musk to start a hard tech company. If you've got some domain experience, a great co-founder, a scrappy mindset, and a lot of perseverance, regular people can actually start hard tech companies now too. I hope that hearing the story from Astranis inspires more people to start hard tech companies. Until next time, thanks for watching.