Episode #251: Robert Jacobson, Space Advisors “It’s Not Just One Vertical, It’s More Like An Ecosystem With Lots Of Different Dependencies…The High Ground of Space Being The Overarching Theme”

Episode #251: Robert Jacobson, Space Advisors “It’s Not Just One Vertical, It’s More Like An Ecosystem With Lots Of Different Dependencies…The High Ground of Space Being The Overarching Theme”

 

Guest: Robert Jacobson is a multi-faceted entrepreneur, advisor, and space advocate who believes that space is the key to humanity’s successful future. He has served as a principal with Space Angels (formerly Space Angels Network), the leading source of capital for aerospace and aviation startups, and on the board of directors for the Space Frontier Foundation. As one of the first team members of Arch Mission Foundation, Robert notably worked to initiate the first Solar Library (the payload famously launched in Elon Musk’s Tesla in 2018), and the first Lunar Library (the archive contained in SpaceIL’s Beresheet, which crash-landed on the Moon in 2019). Today, in addition to releasing his book, Space Is Open for Business: The Industry That Can Transform Humanity, Robert continues to build on a decade-long career advising private investors and founders in the potentials and benefits of space. 

Date Recorded: 9/9/2020     |     Run-Time: 54:32

Sponsor: Ikon Pass

 

 

 

 

Summary: In today’s episode, we’re jumping into the space industry. Robert has a new book out, Space Is Open For Business, The Industry That Can Transform Humanity. Through his career, investments, and his process of research and writing his book, he’s acquired a wealth of knowledge that we get into today.

We cover some of the historical groundwork on the space industry. We discuss ‘New Space,’ some interesting work that’s being developed, and what the funding scene looks like right now. We later get into global space, and some recent initiatives around the world to establish space industry presence.

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Links from the Episode:

 

Transcript of Episode 251:

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.

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Meb: Hey, hey, friends. We have an out-of-this-world show for you today. Our guest is entrepreneur, advisor, and founder of Space Advisors, a strategic consulting firm for space startups. In today’s episode, we’re jumping into the space industry. Our guest has a new book out, “Space is Open for Business: The Industry That Can Transform Humanity.” Through his career, investments, and his process of research in writing the book, he’s acquired a wealth of knowledge that we launch into today. We cover some of the historical groundwork on the space industry. We discuss NewSpace, some exciting projects being developed, and what the funding scene looks like right now. We later get into the global space race and some recent initiatives around the world to establish space industry presence. Please enjoy this episode with Space Advisors’ Robert Jacobson.

Robert, welcome to the show.

Robert: Hey, Meb. Thank you very much for having me today.

Meb: I’m located just down the road from you. We’re both virtual. And you got a new book out, and my favourite part of the book, it’s a couple favourite parts of the book, it’s called “Space is Open for Business,” we’re gonna be talking about all things space and investing and history today, but your signature I think was in the intro. It says, “Robert C. Jacobson, April 2020, Earth, Solar System, Gould Belt, Orion Arm, Milky Way, Virgo Supercluster, Laniakea Supercluster, Universe. That may be the best zoomed out description I’ve ever seen.

Robert: Well, thank you very much. I have to give a little bit of credit to…my editor and I collaborated on that one. It was starting with something kinda local, and then we go hyperlocal, and then we’re like, “But this is a space book.”

Meb: It reminded me of that old…I think it was probably when I would have been in school, this really famous video that was trying to demonstrate like the power laws, where it had a girl laying in a field, I think, and it zoomed out and eventually zoomed back in. Do you remember that?

Robert: I do, and it keeps going…yeah. And I don’t remember how far out it goes. Does it start, like, you’re looking at kind of an overhead vantage point, right, like she’s on a field or some grass? And space is like that, you know. I think it’s probably good time for us to remind ourselves that not only are we citizens and inhabitants on the most important spaceship, which is Earth, but Earth is a neighbour flying through every moment of the day and night in the Solar System, so we are also residents, citizens of the Solar System. I think it’s a good time to also think that, hey, we’re also citizens of the Solar System.

Meb: I love it. By the way, the name of that film I think was called “Cosmic Eye” or “Powers of Ten.” Anyway, it’s been viewed like 200 million times. Waddling in the show notes, all right. We’re gonna talk about a lot of fun stuff today. Your book is a fun romp through all things going on in what you called NewSpace. But my favourite part is you really take it back to the space industry in the U.S. to the time of Quincy Adams. Maybe give us a little walkthrough of how things have evolved over the last 100, 200 years, and then we’ll talk about how they’re accelerating here in the 2020s.

Robert: So going back to the days of John Quincy Adams, in the 1800s, he actually was really passionate about building, essentially, astronomical observatories around the country. I’m really not sure why he realised that we need a bunch of these, but he did lobby this. And it was super helpful because we had one of our very first ones, the U.S. Naval Observatory, which people have probably heard of referenced in the news, but it’s a real place, and that was actually established back in the 19th century, 1844. And he also persuaded the Smithsonian in that same decade, 1840s, to become, you know, a scientific establishment and organisation. And centuries later, we are still reaping the benefits from having eyes in the sky and a forward-looking group like the Smithsonian, which has its hands in so many different disciplines. I mean, I couldn’t even imagine the world without the Smithsonian. I mean, I still so fondly remember my very first visit. I think we had an eighth grade trip at the end of the year. It was like the month of May of whenever I was in the eighth grade, we went to Washington, D.C., and going to the Air and Space Museum. It was just incredible. Seeing some of these historical aircraft and spacecraft, the Wright brothers’ aeroplane, Apollo, seeing this all under one roof was just really breathtaking to me as a junior high school student. And those investments and that lobbying and that passion by John Quincy Adams from the 19th century is still paying us, I would say, unquantifiable returns on investment.

And it was interesting, just recently, I came back from my home state of Florida where I was raised in sort of the long shadow of the space shuttle, and I visited an island, in a part of the island that has national refuge. And this refuge was started back in the 1920s. It’s a beautiful place whose name is escaping me. It’s on Sanibel Island. But during a boat tour, the naturalist who’s giving us the tour had shared that it was actually a tourist who inspired the creation in the 1920s and had lobbied for the creation of these parts of this island to be a national refuge. And I’ll tie this into space in a moment. So this tourist who I think was a geologist or had some type of affiliation or a role in the government, but they lived, I think, in the Midwest. They were visiting Florida on vacation, I think, in the teens or early 20s. They realised, “This is a really beautiful area, it needs to be kept partially pristine and protected.” And the people who are residents there in Florida did not necessarily realise that. The point was that it sometimes takes an external eye or that…and this person was even, in fact, a tourist, that not all tourism is a negative activity to make others aware of a potentially valuable resource.

So it did have me think, it reminded me a little bit of what was going on in space, in that the early days of this newer space movement, and I did not coin the term NewSpace, as you had slightly alluded to earlier, NewSpace was a term that started I think about 20 years ago. And it was actually sort of a dirty word. It was not something that was looked on as a positive thing. It was actually frowned upon. And some of the creators of this word were members of a benevolent conspiracy. They were leaders, such as Jim Muncy who was a well-known space policy expert and lobbyist based in the D.C. area, really, really brilliant guy in space policy, Bob Werb who was an entrepreneur and also kind of a space policy expert, and Rick Tumlinson who is a well-known space entrepreneur, writer, visionary thought leader, big, huge heart, and he actually was living in California for a long time. But, so these three guys, they started a group, I think it was in the late ’80s, called the Space Frontier Foundation. And they, along with their peers, created this term called NewSpace. And it was kind of frowned upon, and it was the idea that there were new entrepreneurial ways of doing things. And not that the establishment or old space or government space were necessarily bad, but they were just…we should also take into account new ways of doing things, adding in new energy, taking some of the best ideas of capitalism, entrepreneurial startups, other technology disciplines, and start bringing that into space.

Space was, in many ways, a protected kingdom. If you were a large government contractor, you’re working on costs plus contracts, life could be pretty good for you and for anybody who is connected to them. And connected with that word NewSpace, you sometimes saw the cousin word space tourism, and that can mean a lot of different things to different people. But regardless, that word too was also definitely controversial, and you would see it cut right down the middle. Some people said, “Great word, we need space tourism,” and some people say, “No, that’s about dilettantes. That’s neophyte. This is not gonna help us. This is anti-science.” And I see life as a lot of grey rather than black and white. We have to learn from different perspectives. We need to learn and be open to it. And some of the earliest, I’ll say, human space participants, some of them were, in fact, essentially space tourists, people like Dennis Wingo, founder of Cirque du Soleil, Guy Laliberté, I think that’s his last name. We have the individual Charles Simonyi, who is one of the early employees at Microsoft, he went to orbit to the Space Station twice. Mark Shuttleworth, Anousheh Ansari, and of course, Richard Garriott, who is the first child of an astronaut. So his father, Owen Garriott, was an astronaut on Skylab, and then Richard Garriott had the financial resources through his efforts in the video gaming industry to go to space.

And these individuals spent millions of dollars to have these personal ventures to space, but also, many of them, each, also, they were catalysts for all sorts of other things, some of them known and well-known, that have peppered and then catalyst and influential into this slowly percolating and emerging area known as NewSpace and now what you’re seeing kind of the heavyweights and the industrial titans of Jeff Bezos, Elon Musk, even the late Paul Allen who is deeply involved in this area, and of course, Richard Branson who’s maybe more of a media and travel airline entrepreneur but definitely heavily invested in this area. So I think it sometimes takes outsiders to engender some new ideas, new spirit, and just a new conversation regarding what’s possible, even if it is controversial. Let people try, at least once. Let’s try and then let’s debate it later.

Meb: Well, it’s funny you mentioned the Smithsonian. Two fun memories, I used to love going in D.C. One was getting astronaut ice cream, which was never very good but a lot of fun and novel. And second, I remember I had received Aerobie frisbee as a birthday gift, and so it’s right next to the mall in D.C., which is like the longest possible frisbee lawn in the world, and sure enough, it may not have been throw one, but it was definitely within the first three where it got stuck in one of these enormous trees right next to the lawn. It’s probably still there today. A lot of fun and distraught memories as a young child. But it seems like if you look back in history, and you can kinda correct me or expand on this, that there’s really been sort of two periods. When you think about old space, I have the memories, it’s like the ’50s, the ’60s, Apollo, ending in, I guess, the ’70s, and then, yes, you had the Space Station, but a little bit of dormancy, it felt like, where it wasn’t maybe so much of a focus. And I come from an aerospace family. My old man was aerospace at Martin Marietta and Lockheed, and my brother is at Northrop. So we come from a family that’s obviously been very interested in this industry. But it feels like in the last decade, you start to see the childhood excitement again in the innovation going on. So maybe walk us through any commentary you have on the timeline and the history of what’s been going on, and then we can start to dive deeper into some of the ideas of what’s going on with the more modern world.

Robert: At a high level, you definitely got where there was a lot of energy and excitement from the late ’50s through the early…you could even say the early ’70s, which was kind of the ending of the space program. And for those who don’t know, yes, John F. Kennedy, at the football stadium, at Rice University in Houston, Texas, gave his famous speech, but a lot of it is…you generally hear the sound bites, but when you look at the transcripts or if you want, you can hear the recording, which is widely available, he talks about this greater theme of why we’re going. But the political reason for going to the moon was our competition with the Soviet Union. And maybe it’s just that we’re at a place in our civilisation, in our species, where we kinda have to have like these nation-state rivalries to get us to do big things. And maybe one day that will change, but that’s, at least in the 20th century, you know, essentially, it was communist versus capitalist or democracy. You can go more into the details there, but that is what John F. Kennedy wanted to do with going to the moon. It was essentially beat the Russians there, put a flag and footprints there.

But if we quickly fast forward, the sentiment, and then more NewSpace industries said, it’s like, “Look, that was great for that time, but let’s not just go back into orbit, moon, Mars for flags and footprints, for symbolic reasons, which are good, but let’s actually do things more sustainably, for economic reasons, and other social and science, and even push the envelope further.” And you and I are, in a sense, probably, you know, contemporaries around the same age, and I too sense that I was really into space as a kid, and my parents were into aerospace. I grew up in Florida, so I saw plenty of space activity firsthand with my dad, who took me out to see some launches. And I went to Space Camp in Alabama, which was a great thing. And I think they’re really struggling in this time of pandemic, and I’ve heard that there’s some type of fundraiser for them. So I don’t know much about the specifics, but for those who wanna know about Space Camp or support it, go check that out, because it was a really great memorable and impactful experience for me.

But essentially, I realised starting in high school, I saw a lack of vision and leadership which is going on space. They were kind of planning or they were starting the construction of a Space Station, which would take time because they were using space shuttle, the Russians and some European launch efforts, can’t remember if the Japanese were involved. Even though they have a Japanese module, I don’t remember if the Japanese were using their launcher. But it was gonna take a number of flights, but there wasn’t, like, in this period, there wasn’t…I think they missed the boat on how to keep the story of all this, because construction at the time being it wasn’t a very automated process, they needed astronauts to kinda plug things in, and I think they lost a lot of opportunity to capture generations that could have entered this area because it was a slower pace of activity, and other newer space entrance that had tried in the late ’90s were met with incredible resistance.

In a story I’ll share, it was a man named Andrew Beal, owns a bank. I think he’s based out of Texas. He’s still around. He’s a very high net worth individual. And he wanted to participate in space. He kinda wanna do something very similar to Elon Musk, and he had bought a big ranch in Texas, he was working on architecture there, but essentially, he had to compete with NASA. And NASA, at the time, wasn’t ready to give out additional contracts to newer entrants, essentially, untested water, for whatever reason. And he ended up pulling out. And the irony is that Elon Musk and SpaceX acquired many of his assets, including physical assets, I think there might have been some minor bits of IP they acquired. I don’t think Elon goes and brags about that, but he acquired assets on the cheap, and he continued.

And when Elon was getting into this, he originally wanted to send I think it was like a terrarium to Mars, and he wanted to send some seeds there and see if he could sprout that terrarium and then have a photograph taken with the Martian sunrise or sunset with these plants growing and have that to inspire the world. Then I thought, “That’s such a cool vision.” But when he went to Russia, they wouldn’t sell him a rocket. They just wouldn’t collaborate. So I’ve heard that, on his flight back, he said, “Well, I guess I’m gonna have to just try to do something myself.” And it’s funny how that experience, it was a rejection, he was told to essentially go home, “No, we’re not gonna sell to you.” They probably thought crazy, stupid American. Little did they know what would happen over the next two decades, and that was I think around between 2000, 2002. Also, around that same time, Jeff Bezos established his space company, Blue Origin.

So there was this period of…I guess it was a gap in the ’90s where it was just very difficult because there weren’t many new economic business cases, you couldn’t go to an investor because the CapEx was too high or they said, “Look, we’re gonna have to fund this for 10 years until like something happens.” It wasn’t tenable. But Elon Musk did have financial resources to put in, essentially, the first $100 million until he essentially bought in any equity investors. So it was not unique, there’s been plenty of other wealthy people who could have done that, but a lot of them just didn’t have the balls or the vision to do that. Now, apparently, decades ago, the Rockefeller family actually did invest in a propulsion project I think back in the late ’50s or early ’60s, which isn’t well-known.

Meb: I wonder how much of it…so if you look back at the first sort of epic in space it was defined, it feels like, by government, big budgets, big projects, almost like a velvet rope where there’s not a lot of small companies, certainly not many startups. It’s the Boeings, the Lockheeds of the world. And then fast forward to now, which we’ll get into more in a second, but I wonder how much of a galvanizing force the XPRIZE was. And you talk about that a bit in the book. Do you think that was sort of a bridge to where we are today? Because it seems like that idea of “Hey, for this limited prize, budget, reward, we could actually have entrepreneurs approaching very real problems that maybe is not just gonna be only a game of NASA and massive budgets.”

Robert: I have a portion of my book, it’s sort of after the main copy, where I talk about identifying sustainable steps to creating a trillion-dollar-plus space industry within one decade. And I do talk about competitive efforts and prizes. And for me, personally, the XPRIZE competition was very important because after I sort of, not lost interest in space, but realised a path through NASA was unlikely to be my path in life at that time, and I went to do other things. But then, in the early 2000s, I’ve heard about this XPRIZE thing even if it was sort of occasionally seeing it in magazines and didn’t really know how real it was or wasn’t, but that didn’t matter. It just put a kernel in my own head. And then, on June 20th, 2004, true story, I was playing a concert at a festival at the Roy and Edna Disney concert hall downtown. That’s the theatre below Walt Disney Hall, there was a festival, and I was backstage, I was telling people, “There’s gonna be this rocket launch tomorrow morning, Monday morning, June 21st. It’s like a private rocket launch. Like, it’s gonna be incredible.” People are like, “Okay, kinda crazy, you’re gonna go out where, Mojave, California? We just passed through there going to Mammoth.”

Well, I got one buddy of mine to go with me. We drove out there like at 2 a.m., and it was just an amazing experience. And it really did reawaken something inside of me, and I didn’t quite know what the next steps or what this meant for me, but I knew that this was important, historically. And what happened that day was that there was the Burt Rutan-designed aircraft funded by the late Paul Allen. They flew the first privately designed and funded spacecraft that could hold, I think, three humans but only had one pilot on board to the edge of space, which is 100 kilometres above sea level or 62 miles. And that was the precompetition flight for the XPRIZE. Because to win the XPRIZE, you had to do it like twice within a couple of weeks with a certain amount of weight equivalent to like three people.

But what’s not as well known is that, although there was money invested by other teams, when the XPRIZE competition was actually won, which was October 4th, 2004, there really weren’t many funded credible entrants. And that’s maybe a little disappointing. There was a lot of energy and money, but nobody had the resources, nobody had that Paul Allen-Burt Rutan team. There was just no other close shot. But there was the team that became XCOR Aerospace, which I was deeply involved with, which had considered assessing it, but they considered it a distraction. But I think there are still opportunities to take what was done with the XPRIZE competition and use it in other areas. And in fact, there are several good papers that are academic-focused, but they talk about like the return, they talk about all the investment that went into it. So competitions to spur technology innovation can be used.

One that was existing for a while that’s not in the space that’s a really interesting model is the Department of Energy has one on, essentially, energy-efficient homes. They invite universities from around the world to build these sustainable homes. But they’re judged not just on like what powers them or what’s novel about them, but they even get judged on the marketing, like they have to have a marketing team. So they bring in interdisciplinary groups. And I think when groups, if they’re thinking about doing, say, a competition or something, they think a little more broadly and think about how they can do things with an interdisciplinary mode of thinking. They can get some really neat end results. And I think space could still benefit from more competitive opportunities, and I do talk about that in the book.

Meb: So you talk about, back in the day, NASA used to have a pretty big budget. I think at one point, you said, and I could get this wrong, it was like 4% of budget. It’s now to the right of the decimal, whereas Department of Defense is still a pretty big chunk. As things are shifting from government-funded, and you outlined also how, by the way, it’s an incredible return on investment of their investments of the public money, as things shift private, let’s do the lens on the past, I don’t know, 10 years or so. What are the opportunities? We’ve done a couple space chats before, and everyone I think assumes it’s all about rockets, right. Like that’s what people see. But give us an overview of what the space industry looks like today, what are some of the opportunities, and then, eventually, we’ll get into what’s on the horizon too.

Robert: So, yes, I think one of your past guests, Lisa Rich, who’s I think how we connected, Lisa’s a great example. Her and her husband Jeff Rich were our successful entrepreneurs from outside of the space industry. Also, they were working in technology…a different part of technology, say, software technology. And then they started realising, what are the other interesting leading-edge areas? AI, biotech, blockchain, space. And space is in there. And I think that they have also a particular fondness. So space does have a little bit of like sex appeal. Some of the people who get attracted to rockets early on, they come in. But now, there’s actually plenty of opportunities for those who want to participate. There are startups I’ve seen that are now trying to help out with areas of logistics and basically the whole supply chain in the aerospace side if you wanna think about like better optimisation, efficiency, security areas.

Let’s just say you’re a health care practitioner and you’re thinking, “I got a few shackles. How could I participate in space?” Well, there’s now both directly related and tangentially related biotechnology areas that are connected to space where they’re doing R&D in space for applications here on Earth. Let’s just say you’re a real estate person. Well, there are spaceports and other…think of them like business parks and industrial facilities, some that are having aerospace focus that are being built and established and developed in different parts around the world. There are opportunities there. If you’re just a software person, you can look at it from that lens. But you’ll find that, many times, the areas of space, the edges do bleed. It’s not just one vertical. It’s more like an ecosystem with lots of different dependencies, with the high ground of space being the overarching theme.

Meb: And so, as you look around what’s getting developed, what do you see as a couple use cases you think are either pretty cool, pretty interesting? Feel free to highlight any companies as case studies, etc. But what’s some interesting work that’s going on that our listeners might find pretty cool?

Robert: The low-hanging fruit for the past few years, which may be a little bit fished up, was these lower Earth-orbiting satellites, that we’re building constellations and providing some type of service. They’re monitoring the Earth, maybe they’re providing communications. Some of these things are still being built out. And there’s probably still room for it, but it’s expensive to build multiple satellites. But you will see that companies are starting to recognise that it’s not just about having the satellite performing the tool. The customer doesn’t care that you have a satellite. They just want something useful and actionable. So some companies are even rebranding themselves as data companies or intelligence companies, and maybe that’s for optics. But I think some of the smart plays right now or the profitable plays is where they’re creating applications based on someone else’s hardware system, a new use case.

Being here right now in California where it’s a little bit smoky, I could see there are use cases where you’ve got space sensing asset satellites that are able to use radar to peer through the clouds and look at the landscape there. So you think of any reason why someone might need to detect some type of change or pattern, whether it’s vehicular traffic, maybe large patterns of animal migrations, deforestation, fires, boats crossing oceans, thinking logistics, those are really good use cases that can help us make more informed use cases, wallow our society to preserve the environment better and operate more efficiently, from the overarching theme. Some companies are doing cool things. There’s like a company out of Scandinavia called ICEYE. They started where they wanted to help ship traffic where there’s icebergs and there’s new ice flows up in the Arctic Ocean where there’s boat traffic. And I think their business model is kind of broadening and changing. Because you’ll find that many space companies will start with something very particular and then they’ll kind of manoeuvre like many companies where they find customer traction.

A well-known company that’s now pretty established called Planet, they were formerly called Planet Labs, and they were inspired by a project at NASA to put essentially a mobile phone in space. And they said, “Gosh, okay, mobile phones are kinda disposable and cheap. Why don’t we have that in space? Why do most satellites have to cost hundreds of millions of dollars? Can we create some type of scale where we build smaller objects, and as we build these smaller things that maybe get us 80% or 90% of the way to $100-million satellite, and then as we’re dealing with technology obsolescence, we can replace them?” And for those who say, “Oh my gosh, Robert, aren’t you just cluttering up the space environment,” is that, at lower Earth orbit, which means a lower altitude, these satellites, if they don’t have propulsion, will slowly decay and burn up in the atmosphere, and there’s really no pollution.

But the other thing that’s a little bit further on the technology horizon, and this is really cool stuff, is there are already development projects underway to do recycling in space. So think taking your old satellite and repurposing it for maybe a new satellite doing something else with it. So many space entrepreneurs and engineers are starting to think about areas of keeping lower Earth orbit sustainable, which means, you know, not having your spacecraft collide into each other, being a good actor, a good neighbour. How do we do things for the long term? You’ll actually find that many space entrepreneurs do sometimes have a social bent. They care about Earth, and they’re thinking about applications that are good for the planet right now, will make investors lots of money, and push our civilisation’s technology capability further out. And I think that’s a great win all around.

Meb: Where’s most of the money coming from today? You mentioned, you know, in the early days, we got NASA, we got the big conglomerates, we had the era of the contest, but really, it was rich dudes. You mentioned about three or four, and correct me if I’m wrong. Where are we starting to see venture capital, grants, governments? What’s the funding scene look like today?

Robert: So the funding scene is wide and varied. So if you’re a service contractor and you’re working maybe for…you might be doing some work for NASA, and there’s contracts, but you need [inaudible 00:32:02] some growth capital, but venture capital is not gonna necessarily fund you because you don’t really have a…you don’t fit in their model. The government has had things called SBIRs and other grant-making opportunities that allow from essentially $100,000 to even $1 million-plus of non-dilutive equity that these companies can go apply for. The thing is there’s lots of paperwork, and they’re kind of bureaucratic, and some businesses are very good at winning them, but you have to look at you opportunity costs if it’s worth it. There is a very healthy early investment area in the angels sector now. I was on the early management team at Space Angels Network, and at the time, there weren’t as many angels that’s individual investors or even groups playing in the space arena.

Now, there’s really all sorts of activity, and there’s groups doing syndications and even some people tried to do some crowdfunding models. I’ll give a shoutout to the good people at Solstar Space that are building the first Wi-Fi network in space. They sent I think a tweet from a Blue Origin spacecraft, sub-orbital spacecraft that went to space. It’s started by a number of space veterans. They’re using I think a crowd equity platform, so I think people for as little as $100. So that’s an example of using crowd equity and democratisation of the financing of space. So $100, it’s relatively affordable as an investment. Then you have more venture firms that the larger ones that maybe have done a 1Z or 2Z in terms of a space deal. But you still find the specialised thing, because many firms are like, “Hey, we’re doing health care data, this sort of thing.” And they sort of know that space is a thing, but venture capital has a herd mentality, and they’re not always correct.

And so I tell people, just because there’s a lot of venture capital going into one company, it doesn’t guarantee any success. I think it’s always good just to try to find objectivity and a good amount of data, because space can still be a relatively opaque industry because many things are operated with trade secrets because of national security issues, frankly. So there’s a lot of information that’s difficult to get. So one thing I do share in my book is that I try to basically give people a little bit of a headstart saying, “Hey, if you want just like a quick boost to get a quick handle, I’ve been spending years trying to figure out some stuff. I’ll save you a little bit of time.” There’s a lot of their own homework that they need to do.

And then you have a lot of institutional, I’ll call it the much later stage, family offices, insurance companies, like the Fidelities. They’re the ones that are really funding the SpaceXs. And you have, like, I can’t think of the name of the group out of Scotland that’s been a multiple backer of SpaceX. But you really see the major pension plans and insurance companies and these sorts of groups, they might participate in the much later series of like a SpaceX, for example. You’re not seeing as much exit opportunity IPOs, like, in the public sector yet. It’s more M&A activity. And maybe that’ll change, but also, we’re just in a weird time right now. So I wouldn’t be surprised if we don’t really see NewSpace IPOs for a couple of years.

Meb: What does the scene look like around the rest of the world? What drove a lot of the early space program? You mentioned it was certainly the Cold War between the United States and Russia. Here we are today, instead of Russia, I imagine we’d probably be talking about China. I don’t know. Talk to us a little bit just about the global space scene. Who are the players? Is there any major initiatives going on in other sovereigns other than the U.S.?

Robert: Europe has been an established area for a long time, European Space Agency, and essentially, the way it works is, you know, I think all the member states or most of the member states contribute. And based on how much they contribute is sort of like how much they get in terms of like contracts and their slice of the pie. But that’s established.

More recently, we have…let’s take our friends down under, Australia. There’s a lot of new interest. They created a space agency. Their budget is nowhere near like the European Space Agency or the United States. But I sense that they see the defence/military is a major driver. And I don’t know if it’s falling in parallel, I don’t know who’s influencing who, because I’m not there in Australia, but I am talking with people in Australia, I have a lot of friends there that are working in the private sector. And a lot of them had been working in the trenches a really long time where they had this small satellite idea. They had some type of idea. And they got some funding. Really working deeply in the trenches and weren’t necessarily relying on the government and government contract. They were just like, “Okay, we’re just gonna keep on pushing.” And they’re doing moderately well. And then, in parallel, you’ve got this NewSpace, domestic space agency that was created a couple of years ago, and I think it gives them a little bit of breathing room. It sort of like tells the startup activity or the private activity, gives them a little bit of, like, legitimises their hard efforts.

You see New Zealand, which is also a good friend of the United State, they’ve built a launch site there. And they have a company that was started there called Rocket Lab, and they have a U.S. subsidiary in California. I don’t know what their U.S. subsidiary is called but essentially the same company. And they were kinda doing strategically where they’ve got launches that they intend to happen both in the U.S. and New Zealand. So there were these kinda bilateral agreements that had to happen. Because when you’re dealing with things like launch technology, you have security concerns, because these things could have dual use. They can be essentially weaponised. So you have to have a lot of permissions to take that if it’s a U.S. technology to take it to use it overseas.

You have the country of Singapore, interestingly. It’s very interesting space. You’re not gonna necessarily see launches happening there, but I think they’ve got some satellite and software companies being developed there. And I think what you’re finding is if a region or country has a certain indigenous capability or expertise, they kinda start with that, and then, you know, throw out some funding, they raise the flag, and say, “Hey, we’ve got a little bit of funding. We want some people working here.” The country of Luxembourg has done something similar, and that was actually copied from the Isla of Man, which has been a long time domicile for many satellite companies, has many economic and tax advantages to being based in the Isle of Man. So I’ve seen that Luxembourg is borrowing a lot of that from Isla of Man. And then Singapore is definitely creating their own community.

You have Japan, which has a strong public space agency, JAXA, but they’re starting to see some private companies emerge. A well-known one is ispace, great company out of Japan. They were actually first started as a XPRIZE competition, at the Google Lunar XPRIZE competition, and they were a nonprofit. And then they, ispace…well, they’re called Team Hakuto under the XPRIZE, and then that competition ended, and they created a for-profit venture called ispace, and it’s lunar focused. And the Japanese excel. They’re very good with robotics and automation. And that’s what ispace is doing. They’re building like a rover. They’re thinking about how are we going to utilise resources on the moon. And so they’re kind of focused there.

Even Latin America is trying…there’s interest there and doing things regionally, taking time. I don’t know what it’ll eventually emerge, but there is interest there. And I even think Africa might be a really interesting way, that as the space infrastructure is going to be emerged and developed, it might be a little bit like telephone networks and cellular phones. Look at Africa and India. They had a huge very fast adoption rate of cellphones, because it just took too long, it was too expensive to put in telephone lines. As space infrastructure gets created, I can tie it in, this idea was actually instilled to me by a friend who unfortunately passed away early this year named Hugh Huang [SP], who’s amazing guy, and he unfortunately passed from cancer this year. And I’m so glad that I got to include him in the book, he kinda reminded me, he said, “You know what, keep an eye on Africa for the mid- to long-term with space on how they’re going to take, be very clever, and use all these different things that are getting set up, infrastructure pieces that maybe they have no desire to develop and to create applications.” So I think it’s gonna be really fun to watch and participate in.

Meb: As we look to the horizon, next 10 years, we could even go 20, what are you most excited about as this starts to really snowball? Anything on the horizon that you’re particularly optimistic, excited, wondrous about?

Robert: Well, I don’t think it’s going fast enough, and people sometimes are really impressed by the pace that Elon Musk is going. And I think, gosh, if it were possible for us to go faster and already be on Mars, let’s do it. Because my vision is probably a little bit more in lined with Jeff Bezos’ vision, which is keeping our planet beautiful and protected and taking heavy dirtier industry offplanet and making our solar system a comfortable place for billions of humans to be able to inhabit. And I know that’s a very difficult idea to imagine with the current state, but I think it is helpful to have a vision and work backwards and think about what are the things that we need to do to get to that vision. And I would just love to be able to see in my lifetime people living and working in free space, basically, in places between Earth orbit and the moon, and space stations that have artificial gravity, to be able to have the opportunity to visit in the moon using the resources of the moon in a smart and sustainable way. For those who wanna do things on Mars, let’s do it because we absolutely have to go out there.

Where could we be in the next 10 years? It’s so difficult to know, because you look back at the press releases, well, I think Richard Branson licensed the technology for SpaceShipTwo, which was essentially the core technology came from SpaceShipOne, shortly, in the middle of the XPRIZE or it was like the last flight, they slapped on a Virgin Galactic sticker or they were making a deal. And some of those early press releases said, “We’re gonna be fine.” It’s 2007 or 2008. It’s 2020, and they’re talking about, now, Branson might fly in 2021. I know this shit is really difficult. This is very difficult in all respect to the team, but I think almost everyone underestimated how difficult these things are.

And Elon, I think in a recent interview, Elon Musk in a recent “New York Times” article actually mentioned Jeff Bezos by name, and he basically appreciated what he’s doing. But he basically said, “He’s about the same age as me. He better pick up the pace.” Like, unless…and now, I’m adding this in, unless Jeff Bezos knows something about life extension that the rest of us don’t, so I do think that the pace and acceleration really do need to pick up. So although we’ve learned a lot of things, I would really hope in the next 10 years, there are thousands of SpaceX Starships and Blue Origin New Glenn Rockets flying, and we even have other alternative propulsion to get to space. I mean, I was listening to a really brilliant talk by Jeff Greason who’s in my book, Jeff is just one of the sharpest people in the space sector, a CalTech engineer who spent years of intel, cut his teeth with rotary rocket, led XCOR. He is now thinking about how do we power spacecraft and things here on Earth without carrying the fuel. And when you remove that part of the mass and the weight from the consideration of your vehicle, you can get into some pretty neat opportunities. Because we need to start thinking about how do we get to places in the rest of the Solar System at a faster pace.

So I would love to see in 10 years, I mean, gosh, hundreds if not thousands of these different vehicles flying, that we actually have an artificial gravity space station, and that we have so many myriad of applications. Maybe we create vaccines. They’re working on a vaccine right now for salmonella. Salmonella still kills a lot of people around the world. Viruses behave differently. They have different characteristics in the microgravity environment. And what they spend on drug development, I would love for us to see us spending in, you know, materials sciences, energy research related to space, the life sciences. These are things that will both help us here on Earth and hopefully make lots of great return for the investors, but also improve all of our society’s capabilities.

Meb: There’s certainly an increasing interest as far as you have a pretty awesome compendium of resources in your book. I know, I saw I think it was TechCrunch was doing a space-focused show today, we’ll add it in the show notes if they do a replay. For the investors out there, for the space hobbyists, for people who want to get interested, obviously, they should read your book and check it out. But for people who wanna start dipping their toe in, AngelList, by the way, is a good resource. Listeners, I’ve invested about four, five, six companies there in the space sector. But what else do you think is a particularly good resource? It could be everything from books, magazine, conferences, people to follow, anything and all in between, networks of good people out there, what are some of your favourites?

Robert: You would refer to AngelList, which is now aggregating some, offering some deal opportunities for accredited angel investors. So that’s a place that has deal flow. There are some places where I love learning and two great…I’ll mention some journalists. There’s Leonard David out of Colorado. He’s written books, and he’s just been there, just doing it, and he’s got great insights. I would also…there’s Dr. Charles Lurio. He’s MIT trained engineer, and he has something called the Lurio Report. It’s an email-only subscription, really goes deep, deep, deep in the weeds. Maybe too deep for some, but there’s no one else, I haven’t really found another person like him out there. It’s some ways…that’s a great one. There’s also Jeff Foust who is a long-time journalist who is now…he used to be independent, now he works for SpaceNews. He’s doing solid work, following him. There is Douglas Messier, he goes by Doug. He has something called Parabolic Report. Great blog. What’s interesting about Doug is he lives in Mojave, California, and he follows some of the news, but he gets a lot of the critical things going off the Mojave spaceport. He’s done some really smart and intelligent investigative reporting, because in this age and age where it’s relatively easy to kind of copy-and-paste journalism, Doug is actually still deep in the trenches. He’s done stories on Spaceport America, I think, Virgin. I don’t know if the Virgin people love him, but he’s just trying to do honest work. I’m always for the underdog.

And there’s organisations that were definitely influential to me and helpful to me, so I have to give them shoutouts. They have different flavours, but people can pick and choose on if whether or not they wanna work with them or become members, because all of them are membership based. One is the Space Frontier Foundation, which I alluded to earlier, which is founded by Bob Werb, Jim Muncy, and Rick Tumlinson, an advocacy organisation that really helped make the term NewSpace commonplace or legitimised it. They host an annual conference, typically, except for this year. There’s the National Space Society, which is probably one of the very first space conferences I ever went to where it’s kind of just a lot of fun if you were brand new to this and you wanna actually just go and meet a lot of people. But now, even some of the mainstream, you know, the Bloombergs, the CNBCs, the CNNs, they’re covering space.

Resources, I like to kind of sample lots of things. If someone is really interested in what’s going on, like Mars, Robert Zubrin and the Mars Society. He’s written a bunch of books. He’s a deep thinker. He’s just got so many brilliant ideas. And if someone wants to go deep on Mars and other areas, I would definitely say Robert Zubrin. There are some international resources for those who are like maybe in Europe. There are some resources that they can find that are a bit more European flavoured. Because as much as they want to do more venture capital things, it just has a different field. In some ways, the structure can be different than what we kind of get in North America. So those are some resources. A new book that I recently picked up was from Pamela Hoffman. It’s called I think “The Itty Bitty Space Guide.” And it’s this little bitty book. It’s very easy. But I love it and appreciate it because it’s so simple, and it actually talks about all these easy things that anyone can do to engage in space, which really vary and include from going to a star watching party and having an engagement by just looking through a telescope or binoculars and having a space experience like that to other more varied ones.

So I think that’s something to think about as like what is the person looking for a monetary return and inspirational return or both. Because there’s still, on the commercial side, I believe there’s still tremendous discounts that individual can buy in at. An area that’s very fertile is business-to-consumer. There’s very little activity. You talked about your experience eating astronaut ice cream. People still know about astronaut ice cream, and you can get lots of novelty products. I would love to know how many of those they had sold. There’s probably some of that stuff like NASA t-shirts. Those things probably just sell really well, maybe not a hockey stick, but they just probably sold really well over the long term. And I’ll give just some examples of other different type of business-to-consumer models as Elon Musk and other companies are, like OneWeb and Amazon are trying, and even Facebook, and I even think Apple, wanna put satellites in space to provide internet access for areas that don’t have reliable higher speed internet access so they see basically new customers and new users there. And that’s a business-to-consumer model. But who knows what other applications will be built across that?

I am building and launching soon a very different, it’s not related to that model, but a space themed business-to-consumer business. We feel it’s a blue water opportunity, and we’re really excited by it.

Meb: Awesome. Well, when you guys start to raise some money, hit me up. Robert, it’s been a lot of fun. You got a great book, “Space is Open for Business,” everyone can find on Amazon. People wanna track you, what you’re up to, everywhere else, where do they go?

Robert: Well, I’ve got Twitter going on at @62MileClub. The name is symbolic to the Kármán line, the edge of space, Facebook, Robert C. Jacobson, and they can find me on LinkedIn for professional connections, I think it’s Robert C. Jacobson, Instagram, Robert C. Jacobson. My book website is probably the most good catchall, which is spaceisopenforbusiness.com, and we’ve got like some incredible bonuses that we’re offering when people purchase there direct. I say, go independent. Support independent writers. So it’s just spaceisopenforbusiness.com/book where we’ve got I think the most incredible bonuses ever made available, and I stole this idea from the great Tim Ferriss. So if he’s ever listening out there, Tim, thank you so much, but my bonuses blow yours away.

Meb: Last question, where does one go if they’ve never seen a rocket launch and they wanna go see one? What’s the best place? How do you get to do it?

Robert: If they were in let’s just say near United States, they could go…let’s say on the West Coast, they could go to Santa Barbara, great place to spend the weekend, or Santa Barbara County. And just north of there, there’s a military airforce base called Vandenberg. And I think there is a place where you can either pull over your car, you can’t get right to the site, but you can basically get in the area and see launches. Because it’s a military installation stuff, I don’t know what the timing is like, but that’s one place. The East Coast of Florida is still very reliable, and because there are NASA, United Launch Alliance, an increasing high number of SpaceX flights there, the East Coast of Florida is still a great place to catch a launch. You just need to kind of put in some time or you just don’t expect to show up that day for it to happen. You might have a day or two or maybe even a week delay. And eventually, we’re gonna be having some flights out of Texas, which is what SpaceX is building. I think in the Washington, D.C. area, that’s called the Atlantic Quarter. You’ve got Wallops Island, I’ve never visited myself. It’s I think in the state of Virginia. But I think there are ways to see flights. I think there’s something that happens almost a couple times a quarter, a few times a quarter.

Meb: Awesome. Well, listeners, if you’ve got any VIP access, hit me up. I’ve never seen a live launch. It’s on my bucket list.

Robert: You must do it. It’s a lot of fun.

Meb: I was a little scarred as a child when I built a rocket and had painted, and the paint had sealed the nose cone. So when we launched it up in the air and looked around for the parachute deployment, it never happened. It came right back down. It would have killed me and my father, my family, or something. But thankfully, we survived. Robert, thanks so much for joining us today. It was a blast.

Robert: Thank you so much, Meb.

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.

 

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