Episode #340: Startup Series – Michael Suffredini, Axiom Space, “The Only Thing I Know How To Do Is Build And Operate A Space Station”
Guest: Michael Suffredini is President, CEO and co-founder of Axiom Space, which is building the world’s first internationally available commercial space station to continue what the International Space Station (ISS) community of Nations has begun. Michael has 30+ years of experience in human spaceflight, and served as NASA’s ISS Program manager for a decade prior to his retirement in late 2015.
Date Recorded: 7/21/2021 | Run-Time: 55:19
Summary: In today’s episode, we’re talking all about space travel. We start by hearing about Mike’s time running the International Space Station. Then Mike shares what led him start Axiom Space and undertake the task of building the first commercial space station. He walks us through the business model of a commercial space station and what Axiom’s competitive advantage is when competing with China and Russia. Then we talk about the space economy, including the potential benefits for pharmaceuticals, manufacturing, and even 3-D organ printing.
As we wind down, Mike talks about Axiom’s recent 130 million dollar Series B and whether or not an IPO may be in store in the future.
Sponsor: AcreTrader – AcreTrader is an investment platform that makes it simple to own shares of farmland and earn passive income, and you can start investing in just minutes online. AcreTrader provides access, transparency, and liquidity to investors, while handling all aspects of administration and property management so that you can sit back and watch your investment grow. If you’re interested in a deeper understanding, and for more information on how to become a farmland investor through their platform, please visit acretrader.com/meb.
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 email@example.com
Links from the Episode:
- 0:39 – Sponsor: AcreTrader
- 1:29 – Intro
- 3:18 – Welcome to our guest, Michael Suffredini
- 4:57 – Working on the international space station (ISS)
- 9:04 – Some of the most memorable moments over his years at the ISS
- 13:04 – The government’s position on the station over the past decade
- 16:35 – What lead him to switch gears into Axiom Space
- 20:32 – Episode #302: Lisa Rich, Hemisphere Ventures, Xplore; Episode #223: Steven Jorgenson, Starbridge Venture Capital
- 21:02 – Axiom’s business model
- 24:23 – Overview of Axiom’s first few initial flights
- 30:15 – Partnering with SpaceX
- 31:37 – Plans to build their own commercial space station
- 37:13 – Commercialization opportunities for the space economy
- 43:47 – The competitive landscape
- 51:27 – Is an IPO in Axiom’s future?
- 52:07 – Learn more about Axiom; axiomspace.com; Twitter @axiom_space
Transcript of Episode 340:
Sponsor Message: Today’s episode is sponsored by AcreTrader. I personally invested on AcreTrader and can say it is a very easy way to access one of my favorite investment asset classes, farmland. AcreTrader is an investment platform that makes it simple to own shares of farmland and earn passive income and you can start investing in just minutes online. AcreTrader provides access, transparency, and liquidity to investors while handling all aspects of administration and property management so you can sit back and watch your investment grow. We recently had the founder of the company, Carter Malloy, back on the podcast for a second time in Episode 312. Make sure you check out that great conversation. And if you’re interested in a deeper understanding and for more information on how to become a farmland investor through their platform, please visit acretrader.com/meb. And now, back to our great episode.
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: Welcome, podcast listeners. Today, we have another episode on our podcast founder series, where we invite kick-ass entrepreneurs to chat about their experiences from the front lines of starting a company. We cover everything from newly-minted startups still struggling to make it out of their garage, all the way to the elusive unicorns that are either transforming traditional business sectors with innovative ideas or creating entirely new ones through cutting-edge technologies. Either way, the result will be total catastrophic failure in bankruptcy or hundreds of millions of dollars of revenue and a valuation worth north of a billion dollars. Listen in to hear the tales of blood, sweat, and tears as these founders tried to change the world. As a disclosure reminder, I’ve invested in most, if not all, of these startups and will look to invest more as they continue their startup journey. Please enjoy the next episode in our founder series.
Meb: What’s up, everybody? Today’s episode is out of this world. Our guest is the CEO and co-founder of Axiom Space, which is building the world’s first commercial space station. Amazing times we live in. My goodness. In today’s show, we’re talking about space. We start by hearing about our guest’s time running the International Space Station, and he shares what led him to start Axiom and undertake the ambitious task of building the first commercial space station. He walks us through the business model and what Axiom’s competitive advantage is when competing with other countries like China and Russia. And we talked about the space economy, including the potential benefits for pharmaceuticals, manufacturing, and even 3D organ printing. As we wind down, our guest talks about Axiom’s recent $130 million Series B and whether or not an IPO may just be in store in the future. Please enjoy this episode with Axiom Space’s Michael Suffredini. Mike, welcome to the show.
Mike: Great to be here. Thank you for having me.
Meb: I’m super excited today. You don’t know this, but I’m an aerospace guy. I was an aerospace undergrad, although I didn’t last as long as you did. I know you started out in aerospace too. I lasted until about end of second semester. And I said, “This is way too much math. I just want to be an astronaut.” I don’t want to do statics and dynamics all day. But I come from a whole family of aerospace. I got my dad, who was at Martin Marietta, Lockheed. My brother is at Northrop. I’m sort of the outcast finance guy. You just knew from the get-go you wanted to be an aerospace person?
Mike: I went to the University of Texas originally to be a chemical engineer because that’s basically what my dad did. And I realized quickly that that was kind of boring. Actually, I always liked planes, although space was interesting. I imagined high performance jets. And then I graduated from the University of Texas. The folks at McDonnell Douglas offered me a job here in the human spaceflight business, and so I ended up down here, although I ended up civil serving a few years later and I did that for…until I retired in 2015.
Meb: You just reminded me, I hadn’t thought about this in 20 years, but I had actually taken a course, I went to Virginia, by an astronaut, Kathy Thornton.
Meb: I think one of the first women astronauts. And she taught a history of spaceflight course. That was one of my favorite courses.
Mike: She was the first woman EVA. She’s the first woman to spacewalk, Kathy Thornton.
Meb: She was like the sweetest person on the planet. Okay, so we’re going to get into Axiom and your space station startup. That sounds like a funny phrase. But I figure it’s a pretty interesting time in the space world. I mean, the scheduling of this podcast was fortuitous. We just had a couple crews go up the ladder into the darkness. But we got to rewind. I feel like the best place to start would be with the International Space Station, which you kind of had a hand in running the show for, what, the past decade? Is that right?
Mike: For about 10 years, where I was the program manager for about 10 years. I worked in the program on the Space Station for about my 28-year career at NASA.
Meb: For those who aren’t familiar, give us the kind of the overview of what the history, but also what is the International Space Station, how to begin and kind of what was the purpose?
Mike: Well, I think the roots come in a Ronald Reagan speech I think in…I want to say 1985, where he tried to forge a path for the U.S. beyond the space shuttle. The space shuttle was kind of built with the idea that we’d be servicing low Earth orbit. And so this was sort of the next step in that whole process. First, you create the transportation system, then you create the spacecraft that they service up in orbit, and then you eventually go on the moon and Mars. So that was his proclamation. It didn’t really get established as the ISS program we know today until 1993. And the big change in ’93 was we brought the Russians in the program. If you can imagine, this is a project that at the time we didn’t realize but now, it’s cost about $100 billion of U.S. taxpayer’s money. But it’s 15 nations, started off as 16, although eventually, Brazil stepped out. That’s 15 nations building a spacecraft to meet all of their various needs and assembling it in orbit, which had never been done before. So each took…I want to say 46 assembly flights I think we call it, about 3, 4 Russian ones and the rest were U.S. assembly flights bringing both U.S. hardware and other partner hardware to orbit.
None of the components on orbit saw their mate physically on the ground. So if you can imagine the work that was necessary to build these things and then be able to bring them to orbit, plug them in together, and have them work, it’s a pretty phenomenal effort. Bringing in 15 countries with their disparate needs, another big challenge that we had to overcome. But ultimately, we completed the assembly in 2011. And sort of, at about that time as well as program manager during that period, we kind of transitioned to more of a user mindset. Before it was assemble first, do all the system stuff, make sure everything’s working, and then whatever time was left there, we do research and whatever, utilization. But in about 2011, we said, “Okay, we got to stop being that way because this was a means to an end. But the end wasn’t the system, the end was the using.” So we made that transition in about…I want to say 2013, 2014, we started to focus on commercial users, such as it is, such as you can do as a government-owned facility.
But when you think about it, it’s been wildly successful. We survived a shuttle accident, which really showed how the partnership worked together, how you really have to lean on each other. We have massive control moment gyros, without which you would run out of fuel pretty fast trying to hold altitude in orbit. And that’s a U.S. capability, a Russian capability. They have the thrusters, which you got to have. You can’t do some of the maneuvers without…well, you certainly can’t translate without thrusters. So it’s kind of a symbiotic relationship. We have much more power than we need. The Russians have probably less power than they want, so we feed them power. The whole thing is just…you can’t really break it into pieces. All the countries rely on each other in order to be able to successfully use this thing, and we’re 20 plus years and been just wildly successful.
Meb: There’s certainly a lot of memorable…you mentioned the shuttle accident. It’s such a defining moment for many young people’s childhood and everyone involved in the space industry, of course. I just took my son to go see his first and my first rocket launch up at Vandenberg, right up the road from us, saw a Delta Heavy. We were actually facing the exact wrong direction, where we thought it was supposed to be coming up. Good thing, a bunch of people were tailgating it and they all were faced the other way and I said, “What are you guys looking at?” and say, “Well, idiot, it’s coming up over there.” It was a special moment for sure.
As you look back in this time with the International Space Station, I imagine it’s evolved over the years. You mentioned like, my goodness, having not just multiple countries involved but with different goals and budgets, but across multiple decades. So the people that were involved may have come and go on some of these countries, certainly go through different cycles of prosperity, and struggle, and recessions, and expansions, and countries splitting up with USSR, everything else. What were some of the more memorable parts of that journey with the ISS over the last 20 years? Anything come to mind?
Mike: Quite a few things, relationships with the other countries, in particular Russia. Early on, when Russia came into the program, as you mentioned, there was a bit of turmoil going on. In fact, early on, we had people over there when the tanks rolled in back in…gosh, I’m trying to remember when that was, early ’90s. And throughout that, we watched our Russian partners evolve from where they were at that point, which was you could tell it was a grand capability that the USSR was completely behind. And by this time, it had degraded a little bit so that buildings were worn and the grand rooms were kind of worn. And they’ve evolved from that sort of less interest in human spaceflight to now they’ve invested, invested, invested in more and more capabilities. It’s been a very unique experience to watch that all evolve. When you think about a lot of the countries that we’re holding hands with, we’ve all been through phases of working closely together to being at war with each other not that many years ago.
And even now, when you look at the tensions amongst many other countries in the West and our Russian friends, there’s political tensions, but the human spaceflight piece has been always set aside and said, “We’re not going to screw with that.”
So through all of the tensions and all of the challenges, it’s been really fascinating to watch how much human spaceflight has held countries together. And I think there’s a huge lesson in that. That’s one of the big things for me.
I mentioned it earlier, probably one of the other just giant things that I couldn’t imagine when we first started, but the number of flights to assemble this thing in orbit, which had never been done for, the number of spacewalks necessary to put the pieces together and plug them all in was just phenomenal. You look back on it now, and it seems boring, but the work done to solve problems, to be able to make those all successful… And we never had to return a component. We flew all the major elements on the shuttle that went to the ISS. We’re designed to take two launches, which is the biggest structural impact to the hardware, and all of them went together the first try. So that allowed us to extend the life of the ISS quite a bit, actually. So that’s a big thing.
There are a couple of moments of…where we had failure modes that were major challenges to us that we overcame in the process. There’s a lot. And every culture is different, and working together to solve problems across multiple cultures was always…to me, that’s the biggest thing I took away from that. When the ISS is all done, the legacy will be the partnership. It won’t be that ISS itself, but it’ll be the partnership.
Meb: As it’s evolved over the years, what’s been sort of like the last decade look like? Was this something that the governments, in general, started to say, “Look, this dude’s getting expensive,” or, “Hey, maybe we have different priorities,” or, “Maybe it’s time for a different vision?” What’s the last decade look like as sort of a lead-in to what you guys are getting ready to get up to with Axiom?
Mike: That’s an interesting question because we went through two or three phases really, the design and development phase, leading up to really the first element launch. And then we had kind of this assembly phase, where we were all just running at a thousand miles an hour, and we were all relying on each other. So the service module, the Russian service module got a little bit delayed, so we launched the first two elements. Then like the service module showed up. The service module showed up and we quickly assembled all the pieces, which of course took longer than we imagined. During that phase, really, it was a huge period of just cooperating and working a technical solution. And it really was an era of just you had a bunch of space geeks, who were doing the impossible, and they were just focused on that. And then when the assembly was over, then we all started to slowly turn our attention to why exactly did we build this thing, what are the advantages. And then all countries kind of go through the same thing. They go through their phases of budget cycles and other priorities. And every country has it.
So every year was an interesting discussion about where people were and what they had to do differently in order to stay inside the country. We went through several phases. Us deciding to retire the space shuttle was a dramatic impact to the partnership. It was huge. It was always assumed the shuttle would be there as a mainstay of getting cargo and crew to ISS and back home. So when we made that decision, it was a big impact. Along the way, early in the design phase, it got too costly. And so Europe changed the shape and size of their modules. We evolved what we were going to supply along the way. But once we got to the other end and we built it, then it was this focus on what are we using it for? How do we utilize it more thoroughly? Now, we’re getting to the other side of that and we’re looking towards, “Okay, now, how much longer do we keep this thing and what do we do after that?” So that’s kind of where we’ve been. When we were building this, we were really focused on getting the modules built and make sure they were ready to go, flying, and detaching, and activating, and then focusing on the systems to make sure that the crew was always safe while they were on orbit. Because from the time when we first started, some of the redundancies didn’t all show up until towards the end when other modules showed up. So there was a lot of focus on just making sure all the systems were healthy. And of course, a lot of them were brand new systems we were activating.
And during that period, we were all this laser focused. But then once we’ve finished, then you started looking at usage, you started looking at people having varying budgets at that point. Of course, we had the shuttle accident. That was before assembly was over. And that also impacted our lives. So it’s been a number of things along the way. The unique thing about ISS was you weren’t just worried about your budget, you were worried about everybody else’s budget, every year, what’s going on? What’s changing? Are they focusing on something different? You see what goes on the U.S., it goes on in every country that way.
Meb: So you eventually decided to hang up your spurs. Was that kind of the next step where you said, “I’ve been doing this long enough, and it’s time for me to move on,” pre-Axiom? Was that sort of the right timeline?
Mike: I really wasn’t looking per se until a company I won’t mention came to me and started talking to me about wanting to work for him. That got me thinking, “What do I want to do when I grow up?” because I tell people the 10 years I spent as program manager was really some of the most fun you could ever have because I had a front-row seat to all of the action, and I really enjoyed that aspect of it. I didn’t do any things like manage, so I got to be close to everything that was going on and be a part in the decision process. And that was a lot of fun. I was having a great time. But it got me thinking about what I want to do next. So I would talk to individuals. And ultimately, I talked to a gentleman named Dr. Kam Ghaffarian, who at the time owned the company, who amongst other things, this company supported NASA, the name of the company at the time was SGT, and they did operations and training of the astronauts who were stationed for NASA. So somehow we hooked up. I’ve forgotten exactly how we hooked up. We started talking. And so he suggested that I could come to work for his company. I really wasn’t interested. And he was an ops company, that just wasn’t really of any interest to me.
So interesting, over several months, we would talk and every so often come back. And finally, one day, legitimately saw, after I turned down all of his ideas, and he said, “Well, what do you want to do?” And I said, “Wow, I’ve never thought about that. I just hadn’t really considered doing anything different. I had to think about that.” A day or two later, I called him and I said, “You know what, Kam, I think I would take a pass.
The only thing I know how to do is build and operate a space station.
So I think I’ll wait for the commercial company.” At that point, by the way, NASA already said in the partnership, it kind of agreed that they would not build the next space station low Earth orbit, but they were going to need a space station low Earth orbit. So at that point, that decision had been made by the agency. And so I knew eventually some commercial company, I’m assuming like Boeing, or Lockheed, or somebody would go off to build it. And I assumed my services would be needed and I’d be paid recently for those efforts. So I just told him, “I’ll just wait for the company that’s going to go do that and probably go work for them ultimately.”
And he surprised me with the statement, something like, “Okay, well, let me think about that.”
And the next day, he called me and said, “Well, all right, let’s go build a commercial space station.”
So that was the beginning. He seeded the company, and we started it up together. And I’m the CEO and he’s executive director. And we’ve been running ever since.
Meb: I love that phone call…I mean, was your reaction at first, “Dude, are you serious?”
Mike: It’s interesting. I think it was Mark Twain that says, it goes something like this, “It takes an equal part ignorance and confidence to jump into a large new endeavor,” is essentially what…
Meb: I love that.
Mike: You have to be half ignorant and half confident. So he said that and my brain just clicked like, “Yeah, okay. Well, if you’re in, I’m in.” I don’t know if that was the ignorance or the confidence talking, but, you know, I just, when he said it, I was like, “Wow, okay.” So we’ve always kind of operated that way. We would step out forward with the knowledge we have and always made it work.
Meb: So Axiom was born. What year was this, to give us a little perspective?
Mike: Well, I retired in end of September in 2015. And I started my life as president of commercial space for SGT. It was just a place to put me while we put together the pieces to go do what we’re going to go do. And we actually founded the company as an LLC in January of 2016. And we incorporated right before our first big fundraise in April, May of 2018. So now, we’re Axiom…
Meb: Some of the listeners may have heard a brief reference to you guys in prior podcasts. We’ve had Lisa Rich, as well as Steve Jorgenson from Starbridge on the show, as well as others talking about just space and investing in general. So many investors assume that space is like a…you got to be a government or you got to be a Lockheed, you got to be like a multi $100 billion budget sort of endeavor, and here, you guys, essentially are a startup, for a better description. Tell us what that Axiom sort of business formation and model was five years ago.
Mike: Again, out of ignorance, when we started this, we were really focused on building the station and getting it to orbit as fast as we can. And the early conversations really were with NASA. So this is all the time that this seed round that Kam had taken care of. And in talking to NASA very early on, we started discussing our design, and we had enough of a design sketched out that we knew we were going to be able to house about eight people. We knew roughly when we’d be able to fly, kind of knew who the big players would be. So when we went to NASA and started working on our Space Act Agreement, NASA was like, raised an eyebrow, “Wow, eight people. If you bring eight people, you’re more than doubling the size of the International Space Station.” So at that time, they said, “Hey, you know what, maybe you should fly a few flights before your station shows up so we can kind of know how to work together.” We said, “Oh, that’s a great idea.”
And then shortly thereafter, we started saying, “Hey, you know what, if we’re going to raise capital, we really need to have an early revenue stream.” And so we sort of fell into this idea that we should have missions to ISS, getting ourselves ready for our own missions, and getting NASA ready for our own mission. So that was really the genesis for us for flying people to space before our module showed up. It really came from an early conversation with NASA, but ultimately was borne out as the right thing to do because we needed revenue, because really investors would like to see a little revenue. They’re kind of picky like that. And so for us, it became very clear very fast that the biggest limitation to the International Space Station is really access. The partnership has a certain amount of flights they fly. And they don’t make seats available for everybody else because they don’t feel like they have enough flights themselves. And so not only would there be private individuals that would want to fly, but there’d even be other countries that’d want to fly. It turns out there’s even countries that fly to ISS today that would like to fly more that we’re talking to.
So really early on, our largest revenue stream early on would be the human spaceflight opportunities. We do quite a bit of research leading to manufacturing, but manufacturing is not quite ready to take off. We’re still in the research phase. There’s a lot of sponsorship being discussed and advertising. So those kinds of things are the early revenue. In a few years, we’ll start working with the governments that are on ISS to transition them to our stations. So in the latter part of the 2020s, that’ll start to be a big impact to our revenue stream. Meanwhile, manufacturing is going to continue to grow. And I think eventually in the mid 2030s, manufacturing will just eclipse everything else. We expect to be building purpose-built space stations for manufacturers and stuff like that. So that’s what we kind of imagined the revenue stream to look like. And meanwhile, we’re building our station and preparing for ISS retirement so we can move everything over and let it retire at the end of 2020.
So this is kind of the path that we’ve charted out. And when you look at it from a revenue perspective, in the EBITDA perspective, by about 2025 or ’26, we will have paid back all of the…if you want to look at it that way, the CAPEX that we had to get from investors and will be valued at probably over $10 billion at that point.
Meb: You’ve got a couple of components. And I want to dig in on each of them because it’s a really thoughtful business model as a way to fund some of the early development and then later in, as you mentioned, in different stages, some of these other capabilities, the science, the manufacturing, and eventually almost like a space station as a service as probably the investors would describe it. But talk to me a little bit about the initial flights. And a lot of people are probably, with the news the last week of Bezos and Branson, getting to be a little surprised at the pace of innovation that’s going on. And I remember seeing the initial pitch deck from you all a few years ago and thinking, “Man, this is a lot sooner than I would expect.” Talk to me about these initial flights, what’s going to happen, who’s going, all the good stuff?
Mike: So the flights for us, we have two types of astronauts. We mentioned private astronauts, which is just like it sounds, just individuals who want to fly to space that aren’t career astronauts. And then we have professional astronauts, which will largely be countries that are interested in having a spaceflight capability complete with research and other capabilities that the countries can take advantage of. And so for us early on, it’s the first several flights. So we’re going to do about a flight every six months. Now, NASA’s got to agree to each flight. So far, they’ve approved one. They’ve just sent out the request for the next two flights, which we will compete for. But we expect to fly about once every six months. Our first four flights, we expect to be private astronauts. Our fifth one will be all professional astronauts. Each of our private astronaut flights will have an Axiom professional astronaut. Our first flight is already done. It’s scheduled for late January of 2022 launch. The commander is Michael Lopez-Alegria, who holds the EVA record in the U.S. He’s a retired NASA astronaut, and he’s been with us for…since we started the company really.
So he’ll command that mission. And we have three private individuals who actually have bonafide research efforts that are philanthropic in each case, their philanthropic research efforts. Our second flight is just about done. The commander has been chosen. So that’s Peggy Whitson who is also a well-known NASA astronaut, actually shares the EVA record with Michael Lopez-Alegria. That’s just an accident. We didn’t do that on purpose. And the signed customer right now is an individual who has investment and interest in a number of research-related efforts. So, so far it’s been…these individuals who wanted to fly have wanted to go there not just to experience it, but to do something useful while they’re there. We’ll do that the next, like I said, through our fourth fly…we call them AX1, 2, 3, 4, through our next four flights. So those will all be privates. We have a lot of people interested and we’re working on contracts for several of them even as we speak. Then our fifth flight will be an all-professional astronaut. And there are a number of countries we’re talking to.
Meb: Just to put it in comparison, I mean, the flights that happened over the past week where both the Virgin as well as the Blue Origin, kind of went up and hung out the edge of space for like an hour, these guys are going to be hanging out at the actual Space Station. Is that right? What’s the actual mission look like? How long does it last?
Mike: I should have said that. I buried the lead. So these flights are about 10 days long. It takes about a day or so to get to the International Space Station. We go to the International Space Station, we stay on ISS for about eight days. And that’s really good because it gives your body…about 50% of us will be sick first day or two. So when you get to ISS, by then you have kind of acclimated. There’s a readjustment when you have this big, wide-open space that you’re able to get into. But then about day three, you’re fine, all adjusted. And now, you can spend the next six days just enjoying the view, the environment, doing research, whatever you want to do. And then on day nine or so, the total mission, we pack everybody back in the capsule, and they return home and we recover.
So what both Branson and Bezos and their companies have been working towards…and our flights that go, we call them suborbital. So the flights we do are orbital. We call those suborbital. And they’re really parabolic flights. They’re on a curve. They go way up high and then come right down. They don’t stop. It just goes up and comes back down. And what it does for you, what’s really cool about those flights is it gives you a view. You see the curvature of the Earth, and you see the black space, and you get to feel microgravity for a few minutes. It’s pretty intense. And it gives you just exposure of what it’s like. But when you go orbital spaceflight, we’re 400 kilometers up, so you can see limb to limb, you can see a large part of the Earth, you go through day, night cycles so you’d see it in the day, you’d see it at night. You have enough time to really kind of get your body acclimated to the microgravity environment so you get used to how you swim around. And then you get to do things like eat, go to the bathroom, do stuff. All this is about the experience of living and operating in low Earth orbit.
So what these guys just did is pretty exciting and fascinating. And what we do is really kind of the next step from that, if you will, if you want to think about it that way. In fact, in the Apollo days, leading up to Apollo, of course we did Mercury first, the first two flights were like that. They just went up, and then they came back down, and they experienced microgravity for a short period of time. I think it was the third flight it went to orbit. So that’s kind of the plan. But for us, commercial space is this continuum from what we do on the ground, the short flights, to longer flights, to on-orbit for longer, and longer, and longer periods of time. And so this is just part of that whole process of commercializing space from our perspective.
Meb: Who are you guys partnering with to hitch a ride?
Mike: Our first four flights are with SpaceX. SpaceX and us signed a contract back in December…I want to say December of 2019 was when we signed our first flight. But just like a month or so ago, we announced that we’ve signed for the next three flights, the SpaceX’s next three flights. The commercial flights to the International Space Station, we’ll partner with them for those. And we haven’t determined beyond that. But SpaceX has been a great partner. They’ve got a lot of experience. It’s been fun working with them. Going to orbit commercially is a lot different than going and just staying in orbit in the spaceship. So they’re going to do a flight where they just fly people in the spaceship. You’ve read about it. They’ll be in orbit about three days or so. But we’re going to fly and then go to ISS. And that’s a completely different beast. And while they’ll get us there and get us back, we’re responsible for everything else, the health and well-being of the crew on the ground, before launch, the ascent, the on-orbit piece, taking care of them, doing the research, planning the research, getting everything certified. All that’s our responsibility. And so the first one is in, like I said, January of 2022 we think. The next one will be in the fall of 2022. And then our third one we think is the spring of ’23. And our fourth one, hopefully towards the end of ’23, something like that.
Meb: It’s exciting. So step two is you guys I think are going to start actually…and you can correct me because you may have already started designing and manufacturing, but you actually are going to start building commercial space station. What’s the timeline for that and how do you guys see it, how big is it going to be and all that good stuff?
Mike: It’s a very large pressurized section. It’ll be about the size of what we call the U.S. segment, which is the lion’s share of the ISS today. So to be quite large, we launch it in four main modules. We are actually in the process of manufacturing those modules. The forgings for the bulkheads are already been delivered to … space who is building the modules for us. And they’re starting to put the modules themselves together. So in fact we just were in Italy last week, and I signed the contract formalizing that effort, although we’ve been working on it for the last couple years with long lead buys, things like that. We’ve been doing it on sort of our original contracts. So we just kept it cobbled together so we can keep working and doing the design work and start manufacturing. But we finalized that agreement last Thursday in Rome. So that’s pretty exciting. But they are actually in manufacturing now.
The first two modules are identical. They look like very large nodes. So they have radial ports and axial ports on each end. But they house four crew each. So together, they house the eight-crew and the research capability. And they’re basically building blocks for a station that can just evolve forever. And we do the preliminary design review. We deliver all the paperwork to NASA. So I should back up and say this is completely privately funded. The development, launch, operations, all privately funded. But we have a contract with NASA for them to get insight so they know what we’re doing and they’re comfortable with what we’re doing, and they tell us what they like and don’t like, particularly since we’re attaching to them for several years. So our first flight is in 2024. Our preliminary design for the first two modules is this September. We will close out preliminary design review this September, which keeps us on schedule for our launch. And we build those first two modules.
We’re modifying a third existing module, which is significant modification to what’s called an MPLM. It was a module that used to fly up in the shuttle payload bay and attached to the ISS for a short period of time. And the crews would empty all the supplies and fill it back up and then they would come home. So we’re going to modify one of those. That’s the third module that will fly. And then the fourth, about a year before ISS’ retirement, we will bring up a very large power cooling module, which will also have our air lock in it and attach in it. At that point, we’ll be able to separate and fly standalone. And then we’ll follow up the station from there based on growth and needs.
Meb: And so to give listeners just a little perspective, when you say some of these modules, is it like the size of a car, a house, a bus, a what?
Mike: They’re about 5 meters wide. So you see these pictures of a bus inside a double-decker bus. I think there’s a good picture of a double-decker bus inside the Columbus module. So our module is probably one and a half times or one in three-quarters times that. So you can probably put almost two double-decker buses in one of those modules. It’s a fairly large module. In fact, we’re really pushing the upper limit of the launch capability of the available launch systems to actually throw it to orbit. It will be about 30 metric tons at launch. So it’s very heavy modules.
Meb: And so what are they going to do with the old ISS? Are they just going to shoot it to the sun to burn it up? What’s the plan with that?
Mike: No. That’s a fascinating effort, which I did the last two or three years of my career as ISS program manager is for just how we would dispose of it. First thing is you can’t break it in little pieces and throw it away because the little pieces need some system that’s going to carry it away. The station’s all integrated. So we had to develop a plan to deorbit it. And the plan, we generally keep about 6 metric tons of fuel onboard the ISS, give or take, at all times. So the first thing we do to deorbit it once we’re done, so we would separate and then they do their first burn. And that burn will burn about 4 to 5 metric tons of fuel. And it starts the decay. And it takes about 6 months then to get from 400 kilometers down to about 200 kilometers after you do that big burn. And then at that point, they’ll bring up a couple of cargo vehicles or it will decay a little bit and then they’ll do a planned big burn to deorbit it to a specific point on Earth. And really, if you look at the orbits, so this thing goes around the Earth…I’m telling you way more than you want to know, this thing goes around the Earth 16 times a day, and there’s one orbit that has about 23,000-kilometre stretch, where you don’t go over landmass. We’ll shoot for that one because we have these giant solar rays. They’ll fall off first and pieces of that’ll come down.
And then the big pressurized modules about halfway down, they’ll start falling off. And then the big heavy things like the rate gyros, dense mass objects will go further down range so we need a very long spot. And of course, when you only have one orbit to deorbit in, then there’s a big debate about, “Where’s your backup?” how you do backup and stuff like that. The short answer to your question is they have to deorbit the whole space station as one whole piece. And it’s not as easy as it sounds.
Meb: It doesn’t sound easy at all. It sounds actually really complicated. So once you start building this…and I kind of think of it, I imagine, I got a four-year-old who like putting together sort of Lego blocks and eventually adding modules and over time… And I get most listeners get the sort of habitation, the tourism part, the jumping off to moon, Mars, all that other stuff, what are the other use cases for like the space economy? You referenced a few earlier in the show. Do you want to expand a little bit on some of the commercialization possibilities that can be accomplished in the low Earth orbit?
Mike: The countries today on orbit really focus on the research. And really the reason why the research is unique is when you can pull gravity out, which is by far the largest impact to any biological activity that occurs, you’ll learn a lot about what the secondary and tertiary factors are in anything, in any sort of process. And so for years, doing things in a microgravity environment, they’ve learned a lot about, well, just pick something, pharmaceuticals, sports has been the biggest human spaceflight. It has been all about the testing of the human body and its reaction. And there’s been a number of capabilities and drugs that have been born or tried to have been born out of the microgravity environment.
So that will continue or still to continue on ISS before we get that. But perhaps, more significantly is the research that is starting to be done today to figure out how to utilize the microgravity environment to make things. So today, there’s testing on orbit for a fiber called ZBLAN fiber. And what happens in a microgravity environment, you don’t have convection, you don’t have sedimentation because there’s really no gravity or gravity’s cancelled out. You’re in a constant state of free fall really is what’s going on. And so with the gravity sort of cancelled out, when you pull a fiber in orbit, this hot fiber, the natural forces on the molecules and the charges on the molecules, they separate and form a very even, homogeneous product. So when you pull a fiber in space, it’s very pure in terms of the homogeny of the product itself, and as such, it’s much more effective.
So this particular fiber is so capable when you pull it in orbit that it can pass infrared, which I didn’t know until a few years ago. It’s very hard to pass infrared through standard fiber. There’s actually already a need case for this kind of fiber from the DoD, but it’ll have several other applications as well. So the ZBLAN fiber, there’s a number of companies testing that in orbit today. The other areas where microgravity can be used is in alloy. So when you create an alloy on the ground, you have the same problem. You have convection, you have sedimentation and you get a less than pure product. But when you do it in microgravity environments, you get this very homogeneous structure. You don’t have to build your whole product there, but you may know one or two high-stress areas where if you can manufacture it in space, you can make a much stronger capability and much smaller size. That’s particularly important to things like aircrafts, and rockets, and things like that. So there are advantages there.
Another area that’s very interesting, similar to the pharmaceutical world, there are things being produced in the pharmaceutical world as well, but the idea of 3D printing organs. So you’re starting to hear about that. They’re starting to do it in two dimensions. But it’s projected to believe that we know how to do it, how to 3D print an organ. And the biggest challenge on the ground with 3D printing organs is trying to build the scaffolding that’ll hold this as it’s being manufactured because it really has no structural integrity until it’s fully built. But in microgravity environment, you don’t have that issue. You can build organs in space that you can return home and you can build them relatively quickly. And you don’t have to worry about the scaffolding and the impact the scaffolding might have on manufacturing the organ itself. So that’s another area.
And there are just a number of places. When you’re in this region in space, edge computing is a big thing, where you can have a very large computer, and typically very large computers also need maintenance. And so if you put it on a human-graded platform, you can do a lot of computing in space. And what I mean by that is we pass a lot of data down, it takes a lot of bandwidth to do that. If you can take the data from multiple sensors on orbit and process to the solution you want, just pass the solution down, that’s way more effective than just getting all the data down and then processing it. This is another area where the Department of Defense can take advantage of space as well, where you can do the same thing with sensors and just pass the solution down to the field commanders directly from space. But it takes very large processors, which typically have reliability…not reliability issues, I say, but just the very nature of how they have to be cooled and stuff. You want to be able to have an environment where they can be readily maintained. And so a human-rated platform takes advantage of that.
And you talked about services. Really, what we’re providing with our space station is the infrastructure. So anybody with a great idea can go harness this. You asked me all the use cases and I just told you a handful of them, but this is kind of like the Internet was. The Internet was conceived, it’s an endless amount of access to people and to data, and we had to imagine how we would use the Internet and what it would be good for. Probably 99% of what it’s used for today, we probably weren’t imagining. Well, now, we have the same thing in orbit. You have this boundless access to microgravity, and how we plan to use that is really yet to be determined, all of the possible cases. But the cases that we can imagine can be very fruitful. As I told you earlier, I think manufacturing in space will be one of the biggest things that will come from that. Everything else will pale in comparison to that in the next 15, 20 years I think.
Meb: In this entire time, I thought you were just going to say manufacturing astronaut ice cream.
Mike: Oh, no. We may still send ice cream up and just make it at home. I don’t know. We’ll have to see.
Meb: That was probably, you know, more memories that anyone who’s been to Air and Space Museum as a child, astronaut ice cream certainly leaves a very distinct…like, I can just picture, and taste it, feel it today. I imagine you all’s early success and inspiration kind of with what you’re doing, is it starting to attract competitors? Is China saying, “Hey, look, we should probably build our own commercial space station,” or are they actually like looking to you guys and say, “Maybe we’ll just work with you?” What’s the sort of competitive landscape as far as countries, as well as companies?
Mike: We still are really in the nascent stage of how you fully exploit the microgravity environment. So one of the things we did is we competed for this access to ISS. And really, because we have access to ISS and it’s a very unique access, we really can look to the business case and see that it’s going to be very fruitful. But to fly your own free flyer while there’s a space station, ISS around, is really harder to imagine the business case. So from that standpoint, there are companies that are thinking about it. NASA does want to provide that opportunity for people to build their own free-flying stations. But if you’re flying to the International Space Station or you’re flying to somebody’s free-flying module, I think most people would want to fly to the big International Space Station where there’s crews, basically, relatively speaking. It’s a hopping environment. A lot’s going on. It has a lot of heritage, a lot of history.
So I think early on, from a competition standpoint, I think we’re kind of unique where we are, and that kind of limits the direct competition. There are countries that are interested in being in space that has probably little or nothing to do with us. And you mentioned China. And I think the Russians are the same way. Those two countries, I think, want to…well, I know China does. I’m pretty sure the Russians still want to continue a human spaceflight program. And as such, they would represent a certain amount of competition, although one of the biggest advantages we bring to the table is we’re more commercially oriented. So we understand protecting intellectual property and securing data and all those kinds of things. So we do have an advantage. And we’re really focused on commercial applications, which means multiple users. So governments, or individuals, or entities can utilize this and all get the same secure data.
So I think both Russia and China, they have the advantage of being able to just give access to individuals and entities. But I think the big advantage we’ll bring to the table is the securing of the data and intellectual property. And so I think we’ll have some customers that we may lose to either China or Russia because of…the price is right, but I think we’ll do very well in our own right, particularly with the very unique users who are doing something cutting-edge and are very sensitive protecting their data and intellectual property.
Meb: You guys have a great Twitter account. Listeners, we’ll add it to the show note links. It’s easy to get enthusiastic about what you guys are doing. You’re certainly hiring a lot of people. So check it out. My favorite picture you guys have, however, is like one of the modules with an observatory sort of window module, you know what I’m talking about? I’m not going to say it’s eerily reminiscent of the Death Star, but there’s like a slight design inspiration somewhere in there, I don’t know where but, man, it looks cool. I would just hang out there all day, eat astronaut ice cream.
Mike: It’s interesting… It can house five people. And it’s the only 360-degree unobstructed view of the Earth. So you can see all the way around 360-degrees of that part of the Earth that you’re over at the time. It really is going to be fascinating. We’re able to do that, that’s part of this new technology, is we’re using acrylic, which in the past, we haven’t been able to use in space. But now, with the evolution of the technology to build acrylics, it’s actually better than glass because glass can have fracture concerns, even with the smallest crack that you can’t see. So you polish it to death. It costs you tens of millions of dollars, and it’s a very expensive way to go. But acrylic doesn’t have that problem. You don’t really need redundant paint with acrylic, although we’ll have redundant pressure paints. It has allowed us this opportunity to build this great, large Earth observatory we call it.
Just what you were thinking, I hadn’t thought about that, the Death Star, but we are working on an inflatable module, which we haven’t rolled out yet, but we’re working with the entity that would like us to build it. And when we put that on the end of our stack, it looks like the front of the spacecraft in 2001.
Meb: Oh, cool.
Mike: So remember the big ball front of the 2001 spacecraft? So we may have to put what looks like windows on it when we’re done, but that one will be rolling out pretty soon as well.
Meb: I think, I mean, on these space tours, I imagine you have a long line of people signed up. But that’s worth the price of the ticket alone to get the Instagram I think one day of hanging out in that observatory. Man, that looks cool. Before I let you go, I’ve already kept you for too long, as you look out past 2030, so science fiction quickly becoming a reality, what’s sort of the future look like for Axiom after the first decade plans? Have you guys even thought about that far into the future? And what are the possibilities?
Mike: We really are specializing in this idea of building a relatively low-cost, human-rated platforms for any purpose, so everything from low Earth orbit, to lunar habitats, to transfer vehicles to Mars and beyond. But really, for our route standpoint, we’re building this spacecraft. It’s very evolvable. The modules fly themselves so we can throw away a whole module and put a new one on and just evolve it forever. And I think, over time though, as people figure out ways to manufacture, we’ll be building purpose-built manufacturing stations. But ultimately, we look towards the future in 2050, 2060 where we have a very large space station with a rotating section. It houses about 200 to 300 people. The rotating sections where everybody lives, it has parks, and ponds, and schools, and hotels, and everything you need to live. And people, when they go to work there, bring their families and the families live there. And the center section doesn’t rotate, unlike 2001 and most of the other space stations you see shown. It doesn’t rotate because you need microgravity environment. But it can be a very large center section where a lot of different things can be produced.
And so we see a future where you actually evolve to the point where you’ve really created a city, or a zip code if you will, and it operates like a city where you go pay for a parcel of “land” and you can build a hotel, and you make money, and pay taxes, and you operate it sort of like that. And this really does kind of become a waypoint to whatever you want to do next, so storage depot and all those sorts of things, and you’d be able to set multiple spacecraft. That’s our far future. We’ve been talking about starting to chart our course to that so we can just show people how this really is the permanent step off the planet. When you think about exploration, you got to go to pioneering and settling. And really, we’d like to think that we’re heading to pioneering and ultimately settling.
And that’s what we’re trying to show is that this really is the first step for humanity off the planet now that we’ve explored and know what it’s like. So that’s what our future looks like.
Meb: It’s exciting. I’m cheering for you guys. As far as the plans in the future, this is certainly a capital-intensive business. I imagine a lot of investors would be interested if you guys ever went public. Are you guys planning on keeping the ship private forever or is it a one-day test the public markets and raise money there too?
Mike: We’re headed on to our next round. We closed our B round with $130 million in January.
Mike: Thank you. And we’re headed towards our next round, which we expect to be probably a private round, a very large private round. But then after that, I think we will seriously consider a public offer.
Meb: Awesome. Well, congratulations. I wish you all the success. Where do people find more information if they want to follow the Axiom story, if they want to apply for a job, hey, if they want to buy a ticket, what’s the best place?
Mike: Look us up, axiomspace.com, just like the name says.
Meb: Well, Mike, I appreciate you taking the time to join us today. It’s so much fun.
Mike: Thank you so much. I appreciate it, Meb, very much. I’ve enjoyed the conversation.
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 at themebfabershow.com. We love to read the reviews. Please review us on iTunes and subscribe to the show, anywhere good podcasts are found. Thanks for listening, friends, and good investing.