Why won’t there be a SpaceX in India, unless…
Many of us dream of becoming astronauts who reach out for the stars when we are young despite India not having a human space programme. As we grow up, we start to live up to the expectations of our society and make our ends meet by not chasing such wild dreams rather shaping our talent to contribute to the upcoming opportunities by taking jobs in the government or the private sector or by being academics. There are some who achieve their dreams of working in the space sector and join ISRO as scientists and engineers.
However, there are some who continue on to dream about reaching for the stars much like the way they dreamt in their childhood and take risks in chasing it. Over the last few years, we are witnessing the emergence of NewSpace in India with a vision to build world-class enterprises that do business built on top of developing space assets. Many of these NewSpace companies are built on the inspiration of being able to build a company like SpaceX from India that can match in the spirit of saying not only we have a space agency that is as good as any other premier space agency in the world, but we will build enterprises that will be as good if not better. This is a moonshot but one that matches the growing spirit of entrepreneurship in India. However, what makes a SpaceX?
Unlike many other technology sectors, space is one which needs a tremendous amount of skill, investment, and support to reach a level of fruition in the marketplace to provide substantial returns. If you try to understand how enterprises succeed in the space sector, it’s a mix of several important aspects of an ecosystem. A SpaceX happens because there is not only a vision of an Elon Musk standing by but because there are people who buy into the vision in different quarters, be it the governmental agencies, regulatory authorities, financial investors, etc.
When SpaceX says, we are going to make rockets cheap, they are not just saying we are going to make rockets cheap just for the Americans. It is for the whole world that is exploring space. This is one of the key differentiators of how our vision in India has historically aligned against the one that needs to change now. Yes, we were a country that did not have the means to invest into fancy adventures of walking on the Moon, but we did really well for ourselves by investing early into space for reaping the benefits of space exploration for our society. We ran and continue to run programmes in teleeducation, telemedicine, mapping of resources and even became the first nation in the world to send a spacecraft to Mars at the first instant. However, we are shy to think of a big question. Will we just focus on having limiting ourselves to sorting out needs of our local market or will we build an ecosystem that will take the fruits of investing in space for more than five decades and turn it around to build products and services that can be sold to the world attaching the brand value of Mangalyaan?
Some may say, well we already sell rocket slots and launch many foreign satellites. Remember, space is a $300b market and we don’t come close to even occupying 0.1% of this market in the world. Why? Because the government cannot chase an international market opportunity and ignore the needs of its own society. Recently, the Chairman ISRO said that we have about 34 satellites and need to increase it to about 70-74 to cater to all the needs of the country. Which really means, that ISRO doesn’t really have the bandwidth to stop working on such requirements and jump ship to building international businesses. Therefore, the real opportunity is for people who will dare to build on the fundamentals of our space programme and effectively build products and services for the entire globe with business models that are scalable and sustainable. Now the question is what stands between now and this possible future?
To answer this question, we will have to go back and again review how SpaceX happened to be. We all only tend to remember the great things that happened such as the SpaceX delivering cargo to the ISS or recently landing on a barge. However, what we probably don’t think about in our part of the world is how NASA trusted SpaceX and supported its emergence by providing launch contracts despite its initial launch failures. One of the great lessons is to not only accept failure and providing an opportunity to succeed in the future but is in the leadership of enabling a young brigade to build for the future. Remember, NASA has built and flown all the rockets that humans could imagine. However, someone there said, if we enable these NewSpace folks, and provide them with an opportunity we will see disruption happening not just locally but in the entire world market. And so it did.
SpaceX is not just a story of getting support from a governmental space agency, it’s also a story of being supported by investors who pumped in millions of dollars into a dream of technology disruption. Remember when SpaceX was founded? It was in June of 2002. Which means for the Earth shaking landing of the rocket that SpaceX did on the barge, it took a solid 13-year journey of investments. How did it survive? Yes, Elon was already a millionaire and he did put his millions into SpaceX. But he also had an ecosystem of people in the financial world to ride together into this risk with investor such as Founders Fund, Draper Fisher Jurvetson, putting in their millions to back such a risky venture. So essentially SpaceX happened because they were investors who bought into the long-term vision and saw that such an enterprise doesn’t look at exiting option in 3 years. FYI, it took SpaceX 6 years to come through with its first successful launch after 3 failed launch attempts and having one last rocket left. That was how close SpaceX got to being bankrupt without launch contract from NASA. Finally, when the fourth rocket was successful came the time when NASA itself put in $400–500M with most of that as progress payments on launch contracts.
Therefore, while we India have witnessed a great big number of startups in tech space being invested in with millions of dollars, does anyone around recollect any high-tech company with elements of hardware and software combined with a longer term vision with a disruptive international market focus being invested in? Probably not. Because chances are there are none. Therefore, it is not sufficient for just a bunch of people with passion and skill to come together, it is really important for financial investors to also take a stand on such enterprises. Chances are very much that most of the financial investors in this country do not understand high-tech and cannot make a confident enough assessment, or do not want to stay invested in a company that will say I have arrived only after 8-10 years. We can’t afford to categorically judge or brand such an investment scenario. We probably would have done the same in their positions, given the risk. Sometimes, it probably is just a one-off event that can change everything and we are yet to see that here in India.
Now, let us assume that we have an investor ready to invest despite all risks, a team and technology focus that have the vision to disrupt not only the local market but bring about a change in the way the world look at Indian startups (of mostly being copycats of successful companies). We may be completely unprepared for NewSpace in India because there are no ground rules for any of the enterprises to work on a product or a service that can be offered internationally. Just imagine a team of young enthusiastic people saying we’ll build a sounding rocket today and test it tomorrow and eventually want to build a launch vehicle. How many eyebrows do you think they will raise?
Chances are that every NewSpace company will get hit by words such as spectrum, remote sensing data, clearances from multiple government stakeholders because of the perceived sensitivity of the product or service. This is definitely not to say that this is rubbish. Their qualms are very necessary. However, growing up to handle these issues and growing out to enable growth is what is missing. The US is in a position of world leadership in space not just because of NASA landing astronauts on the Moon, but for the policy makers taking an interest of growing space as a business and being second to none in commercializing space. These important gaps in regulatory framework make it very difficult for NewSpace to happen in India.
Making NewSpace happen in India will be very much like trying to synchronize musical instruments with the founders of the companies being lone center stage orchestrators. The output of non-synchronization is not only bad for the performers; it has an even worse effect on the audience (customers). Therefore, it is not enough to have a qualification and a dream team to make a space enterprise happen. It is not enough for people with bucket loads of money to trust in this team that is aiming at the way we exploit space. It only happens when we all trust each other and synchronize to play the perfect tune that brings a queue tomorrow waiting. We are at a time when this orchestra needs to practice before it performs on the world stage.
So what can we do? Let’s learn from one of the biggest independent successes of our generation in the private industry and apply it to the world. The IT world did not succeed because their first biggest customers were banks or the government in India. They did because they used their talents and resources to reach out to the globe with their solutions and optimized their functioning to the best of their ability, regardless of the ecosystem in India. Space might very well be where IT was at its early 90s in India.
This is the time to collaborate locally and globally to build great space products and services not just for India but for the world itself. Remember, collaborations may not just be technological, but in solving the problems of financing and regulatory frameworks working with global investors and a network of space lawyers.
5 years from now we can achieve providing excellent connectivity to the corners of the remotest villages, 10 years from now we can demonstrate carbon nanotube based propulsion and power production, 15 years from now we may have satellites generating clean energy using space solar power. Let me finish by recalling Dr. Kalam’s forecast that ‘The future generations will look at the Earth, the Moon, and the Mars as a single economic and strategic entity’. A NewSpace revolution awaits us.