Spacetech Failures: Analyzing Major Industry Missteps and Lessons for Investors
The bankruptcy of Iridium, OneWeb, and Planetary Resources; Firefly's restructuring, and Falcon 1's repeated setbacks highlight spacetech as a dance of monumental failures and awe-inspiring rewards.
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Ever thought about the detailed mechanics of a rocket launch or the detailed steps in sending a satellite into space? As we unveil the realm of space technology, accompany us on a journey through its engineering hurdles and commercial pitfalls.
Houston, we have a problem
Space has always been a domain of both allure and adversity. Its beckoning vastness has, on numerous occasions, humbled our most robust technological advancements. The fiery plumes of early rockets like Vanguard TV3, marred by malfunctions, or the tragic descent of Soyuz-1 bear testament to an era where celestial ambitions often met earthly realities.
Human involvement, both in flight and on the ground, added layers of complexity. The factory floor, once bustling with technicians and engineers, is now becoming increasingly automated, minimizing human-induced errors. Yet, the cockpit of a spacecraft still requires a human touch. Despite automation leaps, robots remain tools, lacking the intuition, decision-making, and adaptability of astronauts. AI may augment processes, but the synergy of man and machine remains indispensable. The tragic incidents of Apollo 1, Challenger, and Columbia reshaped astronaut training, emphasizing adaptability and team dynamics over mere procedure adherence.
Advanced AI might optimize operations, but stories like the Apollo 13 incident underline the irreplaceable value of human intuition and adaptability. In 1970, Apollo 13 embarked on NASA's third moon landing mission. But an oxygen tank exploded, jeopardizing the crew and craft. With limited power, a damaged hull, and dwindling life support, they faced a grim return to Earth. Yet, under dire circumstances, human ingenuity shone. Ground control and the astronauts improvised a life-saving solution using materials on board, crafting a CO2 filter to purify air. This testament to human adaptability and collaboration turned a potential tragedy into a "successful failure."
As we reach out further into space, the vast expanse ironically seems less intimidating. Take the early days of lunar exploration: the Moon's surface was largely an enigma. Yet, in the face of such uncertainty, Korolyov audaciously directed his team to design spacecraft under the presumption that the Moon was solid enough for landing.
Fast forward to today's Lunar and Martian endeavors: no longer fueled by the competitive heat of the space race that much, they benefit from meticulous planning and insights gleaned from previous unmanned missions. These steps, albeit gradual, are rooted in the solid ground of knowledge acquired from prior expeditions.
The allure of the Moon and Mars, with their untapped riches and scientific revelations, is undeniable. Modern missions are driven not just by governmental giants, but by the zeal of startups and private sectors. Armed with extensive data from robotic forerunners and free from Cold War-era rivalries, these explorations progress with deliberate precision rather than impulsive rivalry.
Commercial risks
Yet, beyond the technological challenges, spacetech companies grapple with complex terrestrial hurdles: market dynamics, investor expectations, and the competitive dance of supply and demand.
Consider the trajectory of Iridium Communications. Initiated in the late 90s, Iridium aspired to revolutionize communication with a satellite system offering universal voice coverage, supported by a 66-satellite constellation. Despite their high ambitions, the initial Iridium encountered setbacks: their phones were cumbersome, pricey, and restricted in functionality without specific equipment. As cell phone technology surged ahead with more affordable alternatives, Iridium's anticipated market demand dwindled. The result? A 1999 bankruptcy declaration, one of the era's most significant. Yet, Iridium’s narrative took a turn when their assets found a new home under Iridium Communications. Adapting to the times, they launched a modern satellite generation and carved a niche in fields like maritime and defense. Today, they have recovered and stand as a beacon for remote communication services, with a $5.7B+ market cap and $776M+ in revenue.
OneWeb, with dreams of a satellite mega-constellation for universal internet, wrestled to secure funds amidst rivals like SpaceX's Starlink. This culminated in a 2020 bankruptcy, later alleviated by a rescue consortium headed by the UK government and Bharti Enterprises and finally merged with Eutelsat in 2023.
Planetary Resources Inc., fueled by billionaire dreams of asteroid mining, grappled with technical, regulatory, and return-on-investment challenges. Their fundraising efforts faltered, leading to an acquisition by blockchain enterprise ConsenSys in 2018.
Firefly's vision of a satellite launch vehicle hit a roadblock after losing a crucial NASA contract and subsequent investment struggles. Post a 2016 restructuring, they've since rallied with renewed funding and remain industry contenders.
SpaceX, Elon Musk's brainchild from 2002, sought to democratize space travel and entertain Martian dreams. Yet, their initial endeavor, the Falcon 1, faced recurring launch failures. With personal funds depleting and just one launch attempt in the coffers, Musk and his team faced potential oblivion. However, Falcon 1's fourth launch in 2008 soared, marking a watershed moment. Soon after, NASA entrusted SpaceX with resupply missions to the International Space Station. Today, they reign supreme in aerospace.
These tales spotlight the capricious nature and towering stakes of the space domain. Iridium’s journey exemplifies how initial visions can misalign with technological progress, yet can pivot and align with evolving market demands. Meanwhile, SpaceX's odyssey is a testament to sheer determination, underscoring that in the vast expanse of space, success might be a single triumphant launch away after consecutive setbacks.
Uncharted Territory: The Unforeseen Challenges of Space Exploration
Space is increasingly becoming a commercial domain, and with this shift comes a plethora of unanticipated challenges. Many remain underestimated, and, in many ways, we've been fortunate so far. Each of these risks merits a detailed exploration, but for now, let's highlight some of the significant concerns.
A pressing issue is space debris. As satellite constellations like Starlink crowd our low Earth orbit, the danger of collisions intensifies. Such incidents might jeopardize current missions and, worse, a growing number of satellites at some point could lead us to the dander of a cascade of debris, known as the Kessler effect, which could block future space endeavors. As of September 2023, Starlink alone has 4827 satellites and plans to deploy ~7000 more within 2 years. Compare it to the total number of satellites in 2010 which is around 1000.
The cosmos itself isn't without surprises. Rare events, such as The 774–775 carbon-14 spike, could recur once every millennium or century, posing substantial threats to our space pursuits. This spike, attributed to a powerful solar flare, led to a notable 1.2% increase in the concentration of the radioactive carbon-14 isotope in tree rings from the year 774 or 775 CE. This is an astounding 20 times higher than the typical annual variation of radiocarbon in the atmosphere. Similar flares occur regularly but most of them miss the Earth, like July 2012 solar storm. While the 774 event didn't wreak havoc on Earth, a similar occurrence today could inflict devastating damage on our modern technology, especially communication and space-based navigation systems. Moreover, a solar flare of such magnitude would present a significant danger to astronauts. As we push further into space, our planning must anticipate both recognized dangers and the unpredictable nature of the cosmos.
There are also challenges tied to establishing long-term bases on the Moon or Mars. While robots have operated in these environments and astronauts briefly stayed on the Moon, long-term habitation presents unknown challenges. Prolonged exposure to lunar dust or cosmic radiation may have unforeseen health implications and could necessitate substantial financial investments to mitigate or counteract these risks.
Lastly, integrating AI in space missions introduces its own set of uncertainties. As previously mentioned, AI can amplify automation, reducing human error in pivotal moments. However, we are still grappling with how to adequately test and approve AI for space missions. The protocols for incorporating AI into these missions are still in development.
Spacetech is a dance of risks and rewards, of monumental failures and awe-inspiring successes. For investors and entrepreneurs eyeing the cosmos, understanding these intricacies is paramount. Failures, both past and potential, offer invaluable insights, and only by embracing them can we truly chart a course through the stars. After all, the path to the heavens is carved through the labyrinth of challenges: Per aspera ad astra!