Episode #233: Lisa Rich, Hemisphere Ventures, Xplore, “Opening Up The Door For Access To Space”

Episode #233: Lisa Rich, Hemisphere Ventures, Xplore, “Opening Up The Door For Access To Space”





Guest: Lisa Rich is managing partner of Hemisphere Ventures, an early stage VC firm focused on frontier tech. She’s also founder and COO of Xplore, a space company dedicated to deep space exploration.

Date Recorded: 6/18/2020

Run-Time: 1:02:10

To listen to Episode #233 on iTunes, click here

To listen to Episode #233 on Stitcher, click here

To listen to Episode #233 on Pocket Casts, click here

To listen to Episode #233 on Google Play, click here

To stream Episode #233, click here

Comments or suggestions? Email us Feedback@TheMebFaberShow.com or call us to leave a voicemail at 323 834 9159

Interested in sponsoring an episode? Email Justin at jb@cambriainvestments.com

Summary: In episode 233 we welcome our guest, Lisa Rich, managing partner of Hemisphere Ventures and founder and COO of Xplore. In today’s episode, we’re talking about tech and the front lines of space exploration.

Lisa walks through her background as an entrepreneur, and her transition as an investor with Hemisphere Ventures as she saw the emerging case for frontier technology. We talk through some interesting case studies of a few portfolio companies, from Axiom Space, building the world’s first commercial space station, to PlanetIQ, focusing on satellite-borne, state-of-the-art sensors to collect data to improve weather forecasting, space weather prediction, and climate analytics. We then jump into her own space company, Xplore.

We chat about space as a service and commercial capabilities, as well as development of their spacecraft, Xcraft. We dive into milestones that include working with NASA on version 4.0 of the Xcraft, planned to travel to the solar gravity lens focal region as the fastest spacecraft ever built in human history.

All this and more in episode 233 with Lisa Rich.

Links from the Episode:


Transcript of Episode 233:

Welcome Message: Welcome to “The Meb Faber Show,” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas all to help you grow wealthier and wiser. Better investing starts here.

Disclaimer: Meb Faber is the co-founder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

Meb: Hey, podcast listeners, great show for you today. Our guest is managing partner of Hemisphere Ventures, an early-stage VC firm focused on frontier technologies. She’s also founder and COO of Xplore, a space company dedicated to deep space exploration. In today’s episode, we’re rocketing into orbit in chatting space exploration. Our guest walks through her background as an entrepreneur and transitioning to investing with Hemisphere Ventures as she saw the emerging case for frontier technology grow. We talk through some interesting case studies and a few portfolio companies from Axiom Space, building the world’s first commercial space station, to PlanetIQ, focusing on satellite-borne, state-of-the-art sensors to collect data, to improve weather forecasting, space weather prediction, and climate analytics.

We then jump into her own space company, Xplore. We chat about space as a service and commercial capabilities, as well as development of their spacecraft, the Xcraft. We dive into milestones that include working with NASA on version 4.0 the Xcraft, plan to travel to the solar gravity lens focal region as the fastest spacecraft ever built in human history. Please enjoy this episode with Hemisphere Ventures and Xplore’s Lisa Rich. Lisa, welcome to the show.

Lisa: Meb, thanks for having me. Great to be here.

Meb: We’re gonna talk about all things space and aerospace today. I’m based in Los Angeles but I have my Star Wars background. Where are you based and tell us where your background is.

Lisa: I’m near Seattle, that’s a hub of the space industry, not everybody realizes SpaceX has facilities here and Blue Origin is here, and a lot of startups.

Meb: So, I actually grew up in an aerospace family. My old man was a Lockheed Martin guy, was Colorado Native, Martin Marietta before that. My brother is Northrop and then I’ve been here in L. A., and I think SpaceX, I don’t know if its HQ is right down the road. My aerospace began and ended college freshman year when I started out in aerospace engineering and said, “Wait a minute, this has nothing to do with being an astronaut and everything to do with enormous amount of math and physics.” And so, I did one-year internship in aerospace then I said, “That was it.” I’ve moved on to biotech but it’s been a really fun hobby and interest, so excited to talk to you about it today. When were you inoculated? Were you an aerospace nerd from childhood or was it later in life?

Lisa: You know, I think I just have the genes for it because I’m not an engineer myself but my sister is an engineer and have that in the family. But if I go back to those Myers-Briggs tests from college, my results said that I would either be a gardener or an astronaut. And in effect, I am both because I delve into synthetic biology as well as space investing today. So, those are my worlds and oddly that was my Myers-Briggs result from college and I think it’s actually come true.

Meb: So, who knows, I mean, you could find yourself in retirement one day just cultivating your little plot on the moon or maybe Mars, maybe they’ll all come together. But we’re gonna talk about some of your current ventures here in a little bit but I thought as a lead end, we’d probably wind back 5, 10 years to really as you started to get involved in space industry, walk us forward. When did the hobby start to become a career?

Lisa: The hobby, right? Well, it’s interesting. I’ve always been a tech entrepreneur, my entire career I’ve been building businesses and 20 years of building tech businesses starting at the dawn of the internet with some of the first digital strategies that we put on with companies on the internet at the time when they didn’t know the value of the internet. Interesting to go back that far. But tech entrepreneurship led to investment because fruits of our labours, wanted to invest that and understand who was out there and what they were doing. And maybe in 2014, that’s when I was dipping my toe in the water to understand the venture world. It’s an option beyond stocks, bonds, and equities, and, you know, how do you get involved in that, what do you do to be a part of it? Similar to maybe my approach to other things in life, I tend to do a deep dive and get ground truth, and build a network of people that were investing.

So, 2014, Hemisphere Ventures was born. I built that with my founding partner, Jeff Rich, who’s my business partner and he has been my life partner, my husband. And we looked at all the opportunities out there for early-stage investments and said, you know, “What are the big winners that we might wanna be investing in?” We were living at the time not in the San Francisco community where you’re surrounded like Silicon Valley culture. So, we were really kind of further apart from that mind-set of the investments that would be big unicorns, you know, do they exist? And so, we started looking across this landscape and saying, “We can invest in what we know but we can also look at deals and see patterns across the industries. And for us, the pattern that we were seeing was the emerging case for frontier technology.

The idea that as there are synergies occurring as software and hardware meld or computational capabilities expand and you add AI and ML to robotics, all of these things are synergistic and they lead to compounded capabilities and outcomes. So, that you could have a company that years ago, let’s say synthetic biology, for example, you have to build a whole lab to have a company that’s synthetic biology, or now you can rent lab space for whatever the dollars are for square foot to do experiments that could be the ground information that you need to build out a synthetic biology company. That has not happened, it’s kind of the age we’re living in now and it’s unique. So, like that cost of starting a business has been driven down and driven down to the point where innovators can really hit the ground running by plugging in all sorts of efficiencies into their business models.

Meb: So, walk me forward timeline here, this would have been post-financial crisis. When did Hemisphere get its origins?

Lisa: 2014 is when we began investing and really investing across this broad spectrum of sectors to get what we like to call our S&P 500 index fund of venture firms. And then those investments and knowledge of what was out there, like looking at…we have tremendous deal flow, looking at all different platforms, what are the deals out there, but analysing them to see what patterns made sense to us for future investing. So, at the beginning it was let’s look at the landscape and have a broad spectrum of investments which, of course, is recommended for early-stage investors. You should be looking at a large amount of deals to try and have some home runs in there. But separately, we begin to concentrate our interests in frontier technology. And so, by 2017, being active investors we were asked to invite co-investors to join us in our deals.

And so, we were syndicating deals and our focus was all frontier technology which we define as this swath between synthetic biology, robotics, drones, and the space industry, and everything in between. So, kind of complex but if you understand how all those dots connect, it’s really the idea of finding the ground-breaking capabilities that a company has, the larger vision, companies that are looking at platforms, and the team that can execute to achieve them, to actually achieve the vision. So, there’s a lot of moving parts to investing in companies that have these big visions. But as investors, I think we really learned how to assess a company’s ability to really turn on the gas at an earlier stage to have a revenue opportunity so that they will have sustainability to survive long enough to fulfil that long-term vision. So, we began investing and building relationships with accelerators in the U.S. and beyond to understand the unique opportunities.

And accelerators like the IndieBio family, SOS Ventures, with Hacks, and IndieBio and FoodEx in New York. And basically, being friends with all of the people sourcing great deals and being mentors to these companies because I’m a multiple-time founder so I have a lot to share as a mentor. I have the time to do that in the past, I don’t so much now. But we started talking to people that maybe you normally wouldn’t find, like accelerators in Minnesota where you’ve got people that were the sons and daughters of farmers looking at the future for agtech. You have to look under rocks I think to find all these unique businesses that are forming. And so, since 2014, we’ve been building this network to find domain experts that can inform us that this new technology is and then separately those domain experts led to deal flow because smart people know smart people, they tend to be starting companies. We tend to learn about them in a wonderfully organic way.

Meb: That’s how I came to you eventually was through the Angel List platform if tagged along in probably four or five different investments. And I think it would be fun to listeners to hear sort of a case study as how you think about an investing target but also why they were attractive and kinda talk about maybe a couple of names that you’ve invested in that you think are pretty good illustrations of what’s interesting to you guys as well as just fun companies that have a lot of potential, too.

Lisa: Thank you, that is right. You have been following Hemisphere and I’m glad you have some knowledge of the deals we’ve done. And it’s always good to have that exposure to what we’re doing because it starts to maybe meld what we’re about as you see each deal. So, one of the ones that I think really characterizes our mind-set, that unicorn opportunity, is Axiom Space. Axiom is building the world’s first commercial space station. And when they approached us, you might think, “Well, who’s gonna do that, you know?” Who’s going to build a space station that today has a budget of $4 billion a year to maintain and 4,000 people to support it, that’s crazy, right? It would sound crazy. But it’s not crazy when you find out the founding team includes Mike Suffredini who was the head of the International Space Station for over a decade. So, he’s a legend in the halls of NASA.

This is a person that could have retired and instead said, “There’s an opportunity for a commercial space station. There needs to be a commercial space station because the ISS will be decommissioned. It’s entering its end of life. And what if I’m the one to build that and lead that effort?” And he is the one to lead that effort and separately his co-founder was the founder of SGT, which is responsible for all of the human space flight safety measures, astronaut training, etc. for the ISS. So, I think a lot of people don’t understand that NASA has a lot of contractors underneath it that support all the amazing things they do. And so, SGT was one of those companies, the founder had sold it to KBR so now it’s a different entity. But to have your founding member of Axiom, have a proficiency in human life support, that’s that extra slice of knowledge and expertise that is absolutely rare and required to take on the challenge of building out a space station that must be safe for human activities.

Meb: What’s the timeline on that do you think? And also, the interesting thing about some of these ideas that you’re talking about that I’ve come to learn over the years when it comes to space and talking about it, one, it’s not just rockets that a lot of people think about. And two, you just automatically have this assumption, like you mentioned, 4,000 people involved, $4 billion budget, that everything has to be $100 billion company that has massive capital outlays. But that’s not always the case. And it’s not always the case if it is, that it’s all at once. Where are we in the process of having commercial space stations? Is this gonna happen in 1 year, 10 years, 50 years?

Lisa: Everything has to follow a step-by-step process. It doesn’t happen tomorrow. I think people forget SpaceX makes all the headlines and we’re so proud of their launch with our human crew to the ISS, but they’ve been at this for 18 years. So, we have to start somewhere. And for Axiom, they have the ability to train astronauts, they have the ability to fly them now on the SpaceX Dragon. So, that’s an early opportunity is to have astronauts flying to the ISS and hosting them on the ISS for early tourism opportunities, and selling those tickets to the ISS. So, they have an early revenue opportunity because it’s not cheap to have a visit, to visit the space station for 10 days. I think the ticket to the public it’s $55 million for that trip and they have secured people that are gonna go. It all has to start somewhere as I said to enable the reduction of prices in those tickets for later.

The more people go the more the opportunity will exist for, hopefully, the rest of us someday. But they have other capabilities that provide for early revenue because a lot of studies have to be done to allow for the building of the space station and one of those things was how do we build the space station on top of the existing space station. There’s a port that’s the final port on the space station where they can build the module on top of it. And when we invested the question was, will they gain exclusive access and the exclusive right to that port? And so, to some degree, that was a big, big risk in our part to say, “We’re gonna invest in this company before they have that win.” But we felt that they were the only team just reasonably that would win it. I mean, we didn’t know there was no guarantee in terms of their history with human safety for space life. And so, they did get that exclusive access and now we’re all breathing a big sigh of relief so that they can start that build. And there’s a connector that they start with and then from that connector they build on top of it. And I forget the date that that’s going to be installed but prior to that, they will be doing astronaut training for the Crew Dragon.

Meb: Yeah. It’s just like Legos, right?

Lisa: It is.

Meb: All right. Let’s hear one or two more before we move on. Any other case studies you think are pretty cool?

Lisa: Well, we have a company that’s Umbra Lab. And Umbra came to us with this idea of high-resolution SAR which, in general term, it’s space-based imagery. And SAR is a synthetic aperture radar. And this exists today. What’s unique about it is the ability to see through the clouds. We have companies we’ve invested in like Planet that can take images of the Earth and those are very different than SAR imagery. But the quality of the imagery can be orders of magnitude better than it is today with the type of SAR that Umbra has developed. And so, when they came to us with this idea, you know, of high-resolution imagery, we knew it was a powerful idea but we had to go to our domain experts to say, “Can they make this happen?” And one of the founders who was designing it came out of Orbital ATK. He had a stellar history himself. And so, you know, there’s a lot of those clues and early indicators that give you a sense of one direction or the other, can they execute? And what’s very exciting is Umbra is going to launch this year. And so, we’ll be able to have that proof point which is very exciting.

Meb: That is exciting. And it’s interesting to me to see these companies go through the milestones. You mentioned biotech and some of the ideas there and it’s such a long, I mean, 10-year time horizon in some of these as well. But also many of the early milestones are pretty amazing like that already where you’re starting to get some real data points back that you can build upon, you know, or not. Many of us can remember back to the Challenger, watching that in school. The recent SpaceX with my son, I’m like, “We’re watching this on a 15-minute delay, by the way. I’m not gonna expose you to any potential outcomes.” But he’s all-in on space now, loves rockets. All right. One more…any more that you wanna talk about before we move on? Any other pretty cool case studies you’re thinking about?

Lisa: Well, I think there’s a good one that might lead into what I’m doing now with my space company, we invested in PlanetIQ. And PlanetIQ has a complicated device that involves an advanced radio occultation capability. But you told me you have a lot of nerds in your audience so this is great.

Meb: Not a lot, it’s all nerds.

Lisa: All nerds, my people, I love it. All right. So, radio occultation is the ability to read precipitation data from the atmosphere. And they have a next gen capability that effectively the high-quality data that they can bring back can give you the ability to have a seven-day weather forecast with one day’s worth of data. And so, if you think about Earth weather and the advance warnings that we would love to have perhaps in the case of Hurricane Katrina, even a few more hours of warning we could have evacuated more people from the area and save more lives. Weather has so many applications, you know, not just logistics and last mile delivery and human safety, but imagine the financial data that Cowen Financial or other firms would love to have early to inform how they can have better investments with real-time data on weather.

PlanetIQ is unique as well. They want a contract with NOAA, our National Oceanic and Atmospheric Administration, for a weather data purchase agreement. And so, that is a, I think, ground-breaking move that’s taking place in the transition from government services to commercial, where our government is looking to buy valuable services from the companies that can provide unique data. We love what PlanetIQ is doing. They’re gonna be launching soon, just like our other companies, it’s happening soon. So, you can look for that story in the news and we just wish them all the best with their efforts. The father of RRO, by the way, is kind of the founder of the company. He was responsible for 13 of the 14 radio occultation satellites that exists today. So, once again, you know, are you putting money into a company that can execute? We think so.

Meb: You just reminded me, we were out in Joshua Tree recently, pretty good sky visibility. And I’m not sure if it was the Starlink satellite new setup but there was a line of just satellites, it was like every five seconds. As we were watching, they were going across the skies but it was fun to see. It seems like a lot that is going on in this industry, it’s sort of coming together right now and snowballing where a lot of different parts of the puzzle are coming together. Aerospace has long been a boom-bust cycle but it feels right now we’re at a point of inflection at least from the casual observer, that gets to be pretty exciting.

Lisa: But we are. There’s a transition taking place as more companies build satellites and launch them. All the activity currently is in LEO, so it’s all in low Earth orbit and the activity there is kinda two things that they do, it’s communications or observation. And so, those capabilities, that’s just an umbrella for hundreds of services and needs that we have. In the imagery area, for example, I was mentioning, you know, we’ve got Planet, we’ve got SAR capabilities. There’s lots of hyperspectral imagery that you can get to inform the agricultural companies how their crops are doing. And there’s a lot of measurement and analysis that can take place and ultimately trickle down to companies that could benefit from this knowledge that they’re gathering.

Meb: Walk me forward. You guys recently…I don’t know if the right description is you guys recently came out of stealth but you decided, you know, “I’m not done with this whole entrepreneurship thing. I’m interested in launching my own biz.” Walk us through sort of the origin story. What was the inspiration, what was the idea? And then we can talk about all the fun stuff you guys were up to.

Lisa: Sure, thank you. I think that once an entrepreneur always an entrepreneur. Obviously, with Hemisphere, we made that a full-time effort for several years looking really at every opportunity out there. But as we did that, we said, you know, “We’re ready to start out next company and we just have to figure out a great strategy.” And so, we were involved with different groups, space experts starting in 2014. Obviously, we had to build out our domain expert network because Hemisphere, while we have 200 companies in our portfolio, we have 18 investments in the space industry. We have a lot of expertise and working with those people, some of them we got to be very close. And as we look at founding a company, we had partners, you know, that we could work with to build a great team.

So, we started our company, Xplore, in late 2017 and really spent, I would say, a good year honing the strategy for a company that would accelerate the opportunity for space science. And by that I mean we looked at the low Earth orbit marketplace and what’s happening there is a lot of activity, a lot of competition. Well, we don’t want competition, we wanna be the category creator. So, we said, “Let’s not focus on Earth necessarily. We could do Earth activities. But what if we took the tools and techniques that have worked in low Earth orbit and apply them beyond Earth orbit?” So, we have satellites in lower Earth orbit that are orbiting at the space station, they’re 254 miles from the Earth. They might go to 400 or 600 miles. And I say miles, by the way, because we’re American but, of course, all of our scientists want me to use kilometres.

But, anyway, the ability to orbit 600 miles or so with a smallsat which is what LEO companies are doing is typically we’re looking at smaller spacecraft that do not have propulsion capabilities and the focus is all Earth sensors, Earth imagery. So, for not doing any of that, what if, we said, we took the techniques and technology beyond Earth orbit and build a spacecraft that’s modular, iterative, can be produced at volume with the idea that we can provide low-cost access for deep space missions. And so, we’re talking orders of magnitude higher complexity and sophistication of a spacecraft that can go, in our case, this spacecraft behind me, can go 400 million miles into space. And what kind of instruments can we take with us from our customers to bring great science back?

Meb: I mean, I imagine they’re limitless and will develop over time. What’s the original sort of business use cases for once you have that vehicle or craft? I think you called it the Xcraft. What do you use it for?

Lisa: Well, the Xcraft is designed as a commercial capability meaning that we will have customers providing space as a service so that our customers can put their instruments on board and we will take them to their desired destination in space. So, that they don’t have to think about building a spacecraft, they just can focus on their science and the output they hope to achieve from it. So, it is a platform for a multi-mission capability which is very unique and one of the reasons it’s low cost, lower cost than prior missions where prior missions to deep space are government missions that cost $500 million, $1 billion and take 10 years in the making, those mission are very specific and defined in terms of who is on board, what the instruments are, what the achievement of that mission is.

And in our case, we’re opening the door to anyone that wants to, universities, NGOs, sovereign space agencies, civilian space agencies, national space agencies. I mean, we have a private customer already that’s coming on board with this non-for-profit payload being represented. So, if you are sharing the payload bay, that’s a lower cost. And for sovereign agencies in particular where they can put a lot of money behind a single mission, that’s a flagship mission, we’re kind of debunking the idea that you have to put all your eggs in one basket because with a larger budget we enable a programmatic capability so that you could have multiple missions when you fly with us.

Meb: So, tell me a little bit more about the craft and then we’ll start to hear about some of these contracts and grants and things that you got going on as particular ideas to use it for. How does it work? How much does something like this cost? How many of them can you put up there? What’s the timeframe? Who’s building it? Give me all the good stuff.

Lisa: So, a lot of space planning is…the design process is complex. What we’re doing is quite ground-breaking because we have a spacecraft designed to operate in these extreme environments at distances so far from the Earth. And so, if we have customers that need to bring their information back, we have to make sure we can perform for them. So, there’s a lot of work involved in achieving these goals but the long-term vision is that when you have the same design for deep space, it’s almost like we’re building a pickup truck. It’s modular, it’s iterative, you can slice it in any which way to have it compartmentalized with different instruments. So, that kind of versatility is very attractive to our customers and there are different needs that we can achieve for them, and a lot of these begin with studies for the mission.

We’re looking at these efficiencies that we can build into the process to fly our Xcraft to these far-off destinations and do it at a fraction of the cost of what government missions are today. And we are not competing with these missions, the government missions are bespoke. They are answered the questions in the decadals, you know, highly precise scientific instruments will always be needed and desirable, and will cost a billion dollars. But what we’ve done is we’ve said, there’s a lot of capability in instruments that have reduced in size that can fly aboard the Xcraft and we can bring high value information back for our customers without having to have a billion dollar cost. So, it’s really opening up the door for access to space.

Meb: Is there a ballpark cost? That if someone is listening, they’ll say, “You know what, I got the perfect project for you guys.” And then when would we might see one of these up there?

Lisa: We’re not able to talk about the cost, I think, you know, those are programs and things that we could discuss with our customers, but we’re looking at 2022 for our first moon mission. And, interestingly, we have a fun thing. If audience members are interested, we recently launched our public-facing website which is called xplorespace.com. And we’re inviting everyone to send their name to the moon with us for free. We’ll put their name on our data storage drive and it will be in a secured place. And the legacy you can lead for yourselves or your family by sending your name to the moon, I think, is kind of a fun thing. We’re not the first to do it, of course, NASA did this with the Mars Rover, I think, it was in 2020 and they gathered about 11 million names, so that’s our minimal target. We wanna send millions and millions of names with us on our first mission. So, we hope folks will go to Xplore Space and sign up.

Meb: Is the moon project just proof of concept or you guys have some actual projects or partners on that that you’re trying to hit some milestones?

Lisa: You might have read about the air force mission that we have. We’re studying the architecture to create a GPS-like architecture of the moon. So, basically, GPS is our ability that we all have with our cell phone where we know in terms of our navigation capabilities. Everything we have is coming from satellites telling us where our location is on the Earth, and that is what GPS is today. But as you get farther away from Earth, GPS does not work. So, when you’re at those extreme destinations and you’re heading into cis-linear space, what we are going to develop and working with our air force award [SP] support is a cis-linear architecture, so it will be a GPS-like system that can operate in cis-linear space so that we can know where we are when we are at the moon and in that environment. It’s exciting stuff, it’s a whole new architecture.

Meb: You guys did a lot of announcements, a lot of potential projects. Tell me some more ideas or use cases that you can talk about that people can kinda see the possibilities of what may open up with a craft like this?

Lisa: Well, it is, as I said, it’s modular and versatile, and it’s designed to reduce the time to get to space. So, that’s actually a big need because you might care about launch capability and we need more launch capability, and I don’t know that we need more launch capability. I think it’s more the integration problem that might exist the ability to rapidly get to space is not so simple, so that’s a problem. There are a lot of big architectural things that are inhibiting the growth of the space industry, so we like those hard problems.

Meb: You had one. Can you talk about the involving space weather? I think it was solar flares, is that one?

Lisa: Sure. So, we just announced yesterday that we won an award with NOAA to study solar observatories for advanced weather monitoring at the Earth-Sun Lagrange point, which is a million miles from Earth. The Lagrange point is this destination where you can have a spacecraft hovering and it allows you to consistently gather data for weather. So, they need to have a next gen precision weather instruments at L1 and Xplore can take them there, and we’re studying that mission to take the Xcraft a million miles from the Earth which, by the way, L1 is three times farther than the moon. And I wanna talk about why solar is interesting or solar impacts.

Meb: Yeah, let’s hear it.

Lisa: Yeah. The early information that we have on space weather can help us understand what will happen with Earth weather because, obviously, it’s farther out and it’s heading in our direction. So, you’ve got solar flares coming from the sun. If you ever read about sun spots, these are areas that are cooling on the sun and it indicates a higher level of solar activity, where you can have geomagnetic storms generated as a result of this solar events. And you can have particles from the solar flares that are shooting at the Earth and causing damage to our electric grid and other terrible things that it can do. We’ve had events in the past going back to 1869, we had a Carrington event where at that time, the advance technology on the Earth was telecommunications. And the Carrington event basically wiped out all telecommunications on the Earth.

So, if we had a solar event and we almost did, I think 2012 was the year it nearly missed us all these impacts heading the Earth. But an event like that … London estimated would cost $2.6 trillion in damages. It would misfire infrastructure and possibly lead to outages that would last 4 to 10 years. So, can you imagine the instability of our society if something like that happened? It’s kind of unfathomable. So, the earlier we can learn about potential impacts, the better. There’s actually an article I’m gonna…I think I’m putting it on my LinkedIn today that the Smithsonian wrote about in 1972, there were landlines put in the ocean during the Vietnam War. And they were spontaneously detonating and they didn’t know why. And they traced it back and then studied what was the reason for the detonations and it was solar impacts.

Meb: Okay. How do you possibly narrow that down?

Lisa: There’s a whole analysis because we’re going back to say, well, what events have occurred that have been these near misses or these solar impacts that have damaged infrastructure, and there’s a whole history, it’s fascinating. And, by the way, the images of the sun, this heliophysics, all the analysis that they do, they’re beautiful images. So, if you like, you know, space imagery, that’s something to check out.

Meb: And so, I assume that end customer for that it’s almost got to be governmental or sovereign in some way or a multi-country composite, would that be correct?

Lisa: Yeah. So, Xplore is engaging with large agencies as customers. And as an investor, if you had told me five years ago like there’s this company that would have government as a customer, would you want to invest? I would have said no, you know, like is the government customer going to pay you? Are you actually going to get contracts? And the thing is that Lansat changed all of this. The conversion from government to commercial opened up a whole new marketplace. And we have agencies that are trying to enable commercial and there is certainly a bit of a space race happening right now where government agencies want to enable innovative companies to get those concepts through to fruition. So, it’s a great time for space companies and our world is in such a state of disarray right now, yet for space, we’re pretty happy because there’s a lot of work to be done and there’s a lot of support behind it.

Meb: It’s been challenging watching all the amazing news that’s been coming out of space but also I saw this week one of the longest and deepest dives ever in the ocean, all these interesting and then transposing on pandemics and social strife. I was smiling as we were discussing the solar flare one because I feel like that’s the plot of so many science fiction or Bond movies of the past 20 years. It’s like the electromagnetic pulse is gonna take out London and that’s like every, like, one’s worst nightmare. It’s gonna disrupt the stock market, the economy, and everything else.

Lisa: You know, here we have this pandemic going on right now and to think that there’s something that could be even worse, it’s crazy but we have been nearly impacted and so advance warning is the answer. And, thankfully, you know, our government wants to invest in that and think about protecting all of us.

Meb: Don’t jinx us, 2020 is not over yet.

Lisa: No, I know. Can we just take this year off [inaudible 00:39:48] I’m telling you. Well, I don’t wanna say that because it’s actually a great year for Xplore.

Meb: Yeah.

Lisa: Yeah.

Meb: Talk to me a little bit about what’s y’all’s headcount, where are you guys based? What does the next decade look like for you guys? Is it planned on being mostly funded by venture capital, is it grants, is it revenue, is it a combination of all of them?

Lisa: We are unusual because as investors, we’re looking at every dollar and we’re looking at how can we make the most of every possible efficiency to be a sustainable business. And so, with that mind-set, we are proving our value to investors by getting all of these wins in non-dilutive funding, where they see that we’re matching their dollars with non-dilutive dollars, and they like that and there’s more to come. So, we do see opportunities with investors that are the broad-minded investor that can look at big ideas, those are more unique, by the way, because most investors today, I think they have their hands tied behind their back a little bit, especially space investors that have previously invested. They’ve been in space 1.0 companies. And I have two, I mean, the earlier movers in commercial space, we’ve had our losses and we’ve been licking our wounds over those.

And there are other space 1.0 companies that have had, you know, hundreds of millions of dollars invested that have yet to see the proof points. So, I think that there is a bit of a challenge there for people that have invested in space before they are ready to take the next dive or they don’t know when. And so, we’re busy proving out just how real we are with our agencies that we have as customers now, you know, the air force, NOAA, NASA. We’re racking up those customers and that I think is showing the credibility of the team and the capability. And that investors should look for that in early-stage companies always.

Meb: Yeah. There’s definitely some good logos you want on board. Let’s walk forward 5 or 10 years, what does Xplore look like there? What sort of…you can’t even say moon shot because the normal stuff you guys are doing is moon shot almost anyway. So, 5, 10 years from now, what does the business look like? What would you if you had to predict, what would you see the state of affairs of Xplore in 2025, 2030?

Lisa: I think it’s a great question, so much relies on where we will be. And also, I don’t know that I can fully answer that because we’re still very stealthy about our goals. Everyone could read our website, they can read what we do. We are looking for payload customers. We’re looking for principal investigators that have scientific missions that wanna come on board and join us, and that’s the state of affairs today but I can’t tell you what’s in the magic 8 ball.

Meb: You have to come back on the podcast. We’ll probably be doing it holographically in 5 or 10 years, I’m not sure.

Lisa: Right.

Meb: It won’t be Zoom, it will be something else. What’s the state of affairs with their neighbour in Seattle, Bezos? You don’t hear as much about his space activities as the rest of them.

Lisa: I’m glad you bring that up because I visited their facility and I wish everyone could. It’s big ideas and you start to see the future of space becoming more of a reality. His vision of millions of people living and working in space, he’s really serious about it and it starts to come alive for you when you start actually, like if you sit inside of the New Shepherd capsule which I’ve had the privilege of doing. You’re in this Barcalounger chair, there are maybe five or six of them in a circle and you’re in this cosy lounger looking out this enormous window. And to be honest, I walked in there and I thought, “Okay, this is gonna be the experience where you’re gonna go up and you’re gonna see the curvature of the Earth, and you’re gonna come back down. And would I want to do that?”

Looking at it, I thought, “Well, that sounds interesting.” But when I sat in the chair and I looked out the window, I thought, “Heck, yes, I want to do this. Sign me up.” I mean, there’s just something that happened, I can’t quite explain it but I think it’s just this inspirational ability to expand our human footprint and say, “I’ve been there, I’ve done that in my lifetime, and he’s going to be providing that access,” just like Virgin Galactic I think is an exciting opportunity, too.

Meb: As you’ve gone from entrepreneur to investor, back to entrepreneur and done it in industry that, you know, when I think back to my limited experience in the aerospace world, granted it was working for a gigantic company with, I think, over 200,000 employees now. I think really my only input was being on the softball team. But I think a lot of people think that anytime you insert the government, it’s kind of like a weird barbell where startups and entrepreneurship is kind of the opposite of working with these huge organizations of government but rightfully so. So much has to go on with safety and rules and protocol. Longwinded intro of the question of what have been some of the most challenging parts of starting Xplore? Anything that comes to mind as been way harder or way easier than you expected to date?

Lisa: That’s a great question. I think that on the investor side, the hard part about being an early-stage space company is the knowledge that investors have about space at all. If they understand space, they understand satellites and Earth observation and communications. But then when you’re talking about going deeper into space, missions to the moon, Mars, Venus, and beyond, I think the eyes glaze over and people don’t understand that that could ever be a marketplace. And so, explaining that path of wanting to accelerate scientific knowledge for humanity, I have investors that in multiple conversations still don’t understand that we are not sending humans to Venus, you know? So, I think there’s definitely a communication. The essential element of a space company needs to be clear communication and ongoing communication with investors because there is education that’s needed.

We do need to have more of the ability to align what we’re doing with some already experiences that people can equate to, which is why we like to say that the Xplore Xcraft is a pick-up truck. Okay, you know, you can get that. Okay. We’re basically looking at the Ford Model T for space. Okay, now I understand where you’re coming from. So, ways to bring it home for people I think is part of the challenge. And then as I mentioned the barriers of investors that have lost money or waiting to make money, not ready to invest again yet they think it’s interesting. So, for founding a company or running a company, we knew from the start that we’re not a teaching hospital as we like to say, we have to have people that are supremely knowledgeable and have advanced skills. And so, putting together an exceptional team is not just credibility, it’s you have to execute.

I’m a founder of the company, this was our money we put into it, I’m not gonna waste it. So, we’re gonna have to have people that can really make it happen. And so, companies that start with more wild-eyed ideas that don’t have a solid business plan, that aren’t looking at what the dollars are required, that have larger CapEx needs or can’t figure out a way to be smaller CapEx I think are not gonna survive. So, those are a lot of things maybe that’s some advice to some startups that I’m sharing there. Also, the complexity of a space company involves really knowing all of your stakeholders and building relationships with stakeholders with all the different customers that you might have with building partnerships. It’s a lot of work actually.

Meb: Do you think the continued trend of private commercial endeavours will continue or do you think as somebody’s particularly large governments, and I’m thinking China, India, develop that it becomes a return to sovereigns being the big players in this, or is it both?

Lisa: Well, the governments are the bigger budget so they have a reason to be more involved. The space agencies are getting much more active. At last count I think we had 65 emerging space agencies with budgets of 10 million or more. So, that’s exciting to see. And from the sovereigns that we’ve met with, even from countries like the Philippines, the idea that a small country like the Philippines that they could find a way to get to space is really empowering, I think, to uplift these smaller nations. So, that will be, I think, the opportunities for more complex-based programs. But for consumers like businesses getting involved in space, you got companies like maybe Planet that would be the first to be moving in that direction. I think the applications will continue to evolve and more businesses that can understand how they can take advantage of capabilities and imagery and/or communications capabilities from space will be the ones that get an edge over their competitors long term.

Meb: And Space Force, we haven’t even talked about Space Force.

Lisa: Did you watch the show?

Meb: No. They got kinda universally panned so I was a little nervous to turn it on. What’s your review?

Lisa: Sadly. I think that it’s…what I read is that they have the trademark for Space Force and that Netflix has it. And it’s now contested for the government to use it which sounds a little crazy because the show is not Steve Carell’s best. You’ve saved yourselves, I’m sorry to publicly pan it but I think people should save their time.

Meb: You got any favourites while we’re on the topic, any sci-fi shows, books, movies that come to mind as being on your shelf as the favourites?

Lisa: We watch so many documentaries, that’s our thing. So, I don’t know specifically what because we’re always watching documentaries.

Meb: You got any favourites there?

Lisa: I have a fun thing for people that have kids if I can mention it. We sponsored a game called…and you should get this, you should get this, “Xtronaut 2.0.” Dante Lauretta who’s the principal investigator on the OSIRIS-REx mission has this game called “Xtronaut 2.0.” And it allows you to have, it’s a board game and you’re doing a real space mission. So, it mirrors real life in terms of you got your first stage, your second stage, your boosters. Are you going to Alpha Centauri? Are you going on a mission to the moon? What’s your Delta V? That type of thing. So, it’s actually like an easy way for kids to learn about space. And what’s kind of funny and fun is that Xplore sponsored Xcraft 2.0 and so we actually have a card in the game and it’s a very valuable card because it is immune to government shutdowns.

Meb: That’s great.

Lisa: So, just putting it in a plug for Xtronaut. I think they had a Kickstarter, it might have ended already but I think they might have the game on Amazon or something. And also, I would mention for people that are new to the space industry and want to learn maybe who the players are and who’s in the small community. Robert Jacobson wrote the book, “Space is Open for Business.” I think he’s launched it already, I think it’s available. I had reviewed it for him. And he really kinda created this compendium of who invest in it, who are the sci-fi people that have, and their perspective on space, how sci-fi becomes a reality. It’s a neat landscape.

Meb: I was actually looking for that book because I saw you guys had done a video together and I think it’s coming out as we speak, so we’re recording this in middle of June, so I’m looking forward to reading it. I was smiling as you were talking about that game because you’re like talking about a real mission. And for some reason, the first thing that came to mind was the Air and Space Museum in Washington D.C. which I could, as a child, just would spend hours and days at, but astronaut ice cream. That’s all I could remember from being a boy, just getting that kind of terrible but very exciting treat as a kid to having astronaut ice cream, the freeze-dried. I don’t know if you ever had it but…

Lisa: Yeah. So, Mike Mullane, he was an astronaut, I forgot what year. Mike Mullane wrote a book about his outrageous experiences as an astronaut I guess. He has children’s books, too. One of them is called “Do Your Ears Pop in Space?” And so, he was talking about his missions on a podcast the other week and what it’s like to be in space and what they ate in space, and how the bathroom works in space, that always comes up. And I think people are just interested, you know, they wanna know why is this environment so unique and I love talking about that, too, because of the research that will happen in space and does happen in space. But that microgravity environment is so exciting for R&D because you can grow things that are in a 3D environment. We can’t do that on Earth. So how does food behave in those little Capri Sun packages that they send out there and they poke them to get liquid out of them.

We need to definitely advance the idea of food in space. I have companies that I worked with Hemisphere that are in [inaudible 00:54:36] and said they’re doing, you know, fish from stem cells, pork from stem cells. There’s like a lot of opportunities for those applications and first they have to solve the problem of doing stem cells so that we can have food on Earth. But I like them to think broader about what they can do in the future because astronauts could probably use some better food up there.

Meb: You know, it came to mind as we’re talking about that, one of my favourite, not books, it’s a short story was by Asimov and it’s called “The Last Question.” Almost no one I’ve ever talked to has read it. It’s really short, you can find it online for free. I’m not gonna spoil it but that’s a great one to check out because it ties in what we’re talking about here. It’s one of the things that unifies why people all around the world and all ages get so excited about this industry is because of some of the very fundamental questions of what are we all doing here? Before I end on our final questions, is there anything about Xplore we didn’t talk about that you think we skipped over or missed that you think we shouldn’t skip on?

Lisa: I think we talked about the air force and now we have a NASA thing we’re doing which is already planning our version 4.0 of the Xcraft even though we’re focused on 2.0. We’re planning 4.0 to go to the solar granule and its focused region and build basically the fastest spacecraft that’s ever been built in human history. So, you know, we’re doing some really exciting things.

Meb: You can’t skate over that. What does that entail? What is it, propulsion-based or is it some sort of solar?

Lisa: It’s based on the power of the sun, advanced solar sails and actually that’s kind of a fun thing. I’ve been watching, there’s a documentary called…about origami and so, you know, all of these spacecraft that go into space, they have to be compact and fit into a small…the rocket that launches them or what have you. And so, I think looking at for us, you know, if solar sails that have been done before but it’s a neat technology. If people are interested in learning about solar sails, there are some cool documentaries while your netflixing that you might wanna check out. But it’s the ability to, in our case, build a spacecraft that can go 5 to 8 astronautical units per year at the very beginning to get out to the solar gravity one’s focused region which is many light years away. And what’s interesting about these big ideas that we’re working on is that if we want that future capability of being able to have technology, robots, what have you, in multiple destinations in space, we need to get there faster.

And so, right now, we have fuel that we carry with us and when that fuel expires, your mission is over. The Hemisphere invested in orbit fab, for example, which is a refuelling capability that can happen on orbit. So, the idea of gas stations in space is interesting but getting back to the SGLF, we’re talking about using the power of the sun to propel ourselves so that you don’t have that limited resource of fuel that you’re relying on. And we know of other companies that are working on nuclear capabilities to have, you know, unlimited power in space. So, lots of problems that need to be solved but we like to think 10 steps ahead and that’s fun because it helps us advance what we’re doing today as we think about what we can do tomorrow.

Meb: It’s exciting, that’s fun to hear. I was smiling as you’re talking about the origami because my son and I…he’s three. There’s a paper airplane book called, it’s written by the guy who had the longest flying airplane but it’s got a bunch of different designs. In my opinion, not particularly well described. And I was the kid when I was building cars and planes, it always had like 30 things left over at the end. So, my attention to detail maybe not the best but some of these were such complicated origami to take one piece of paper then turn into this crazy airplane. A fun exercise but a little bit maddening, too.

Lisa: It really is like the engineering mind-set that the math involved in origami. And so, the documentary that we were watching is called “Between the Folds,” and it’s just interesting to see what these engineers, mathematicians, with these artists really end up doing and the challenges that they find origami presents and what they can do. I love the paper arts and I love how it speaks to engineering. But, boy, if you put one of those books in front of me with all the numbers on how you fold it and how you do it, I cannot follow that for the life of me. I was actually looking at Etsy, they have books you can buy. And my husband said, “You’ll never do it.” And I said, “I know,” because what I need is like the YouTube person to like literally fold it and say, “Do this and do that.” Because the most I’ve done is I’ve made little penguins in origami and it was in a class so…

Meb: I’m the same way. The video is the right way to do it. Origami masterclass would probably be right. We’ll add the documentary to show notes, listeners, if you wanna check it out. We always ask investors that we have on the podcast, what’s been your most memorable investment? It could be good, it could be bad, it could be anything in between. But anything that’s got a searing brand on your brain, anything come to mind?

Lisa: I think, you know, there are companies we’ve been involved in more closely, like Axiom that I mentioned. And that, from an experiential point of view is number one in my mind because in order to invest in Axiom, we were in Houston at [inaudible 01:00:25] Johnson. We were at the Neutral Buoyancy Lab, and we were looking at all the safety testing and understanding how astronauts go to space. I have personally tried on a spacesuit, you know, so I think the experiential side of that is very cool. They’re my number one.

Meb: That’s cool. Well, I’m cheering for it.

Lisa: [inaudible 01:00:42] matter, it’s all the investments are and they’re all our little kids and we care about them all.

Meb: I gave a talk last year to, I think it’s JPO, I’m blinking on it, in L.A. on investing but the only reason I agreed to do it is because they said they’d come let me take a tour for the day. And so, I was like a little kids just wandering around and checking it out. So, all right. People want to follow what you’re up to, where do they go, how do they follow on? What’s the best places to find you?

Lisa: Probably LinkedIn is the best place, I tend to post there. We have Xplore as well where we’re sharing details on our wins and post our…kind of fun stuff that we post. I will be mentioning that solar flare story on LinkedIn. I think it might be posted today or later today. If it’s not on my personal post, it will be on the Xplore LinkedIn page, so please follow us.

Meb: Awesome. Lisa, this has been so much fun. Thank you so much for joining us today.

Lisa: Thanks, Meb. Happy to be here. Thanks again.

Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback@ themebfabershow.com, we love to read the reviews. Please review us on iTunes and subscribe to the show anywhere good podcasts are found. My current favourite is Breaker. Thanks for listening friends and good investing.