Space Investor: SpaceX Is Only 20% of the Opportunity

Speaker A: You know, in reality, GPS sucks. It doesn't really work very well.

Speaker B: This stuff is happening now.

Speaker A: If we are able to put AI onto steroids, what does that enable? And I don't think we're that long, uh, away from that. Um, it feels that all of these technologies are converging at the same time. You've got quantum, you've got AI, you've got space. In particular, those three elements, as you bring them together, uh, is going to be the nucleus of the big things that happen next.

Speaker B: Mark, dude, appreciate you taking the time out. I'm incredibly excited for our conversation today for a lot of reasons. So thank you.

Speaker A: Great to be on the show. Thank you for inviting me.

Speaker B: Yeah. All right. So as I explained in the green room, um, I was excited to have you on the show for a couple different reasons, but one in particular and for the audience as well. Like my goal for our conversation and whether we prove this to people or not, is to make the case that space related companies, space tech, the, uh, work that, the engineering and, and that goes into, you know, creating the products that get us there. This is something that needs to be on people's radar. And I get that the world is crazy and chaotic and there's a million things that can grab your attention. And I'm not saying everyone should come out of this trying to be an expert in space tech, but I really want to put this on people's radar. Um, and you know, I think we found the perfect person to do that.

Speaker A: So I'm excited, I'm excited to uh, to share that with you. We're going to, we're going to have a fun conversation that I can promise you.

Speaker B: All right, so you, uh, your fund, you've been involved in this area for a long time. You've helped different companies, uh, ipo. So you've been throughout the spectrum of what, of what happens in this space. Um, I think at a, at a broad level just to kind of give us a, an anchor point for our conversation. I would love for you to start with what are some of the things that maybe people don't realize are realities today? And maybe what are a few or if there are any things that people may think is happening today, but is really a technology that's down the road just so we can kind of level set people's brains on what's real and what's not in the space technology space

Speaker A: really jumping right into the middle of it there straight away. So yeah, now happy to sort of respond there. So where we are today is that um, for the last decade SpaceX has really been an enabler for access to space in a way that we've never seen before. So last year there was a launch every 27 hours. Um, space is low, uh, cost to access and that's led to uh, a whole range of companies establishing themselves to build um, satellites. Smaller, lighter, cheaper, large constellations, ah, have resulted and they are here today. The biggest that everyone is aware of is the SpaceX, um, communication, um, ah, network, uh, Starlink and it's changing lives around the world. Um, it's making journeys on planes and trains and boats more palatable. Everyone's life is already being impacted by that. And um, we could come on and talk about um, all of the other different types of um, capability that's coming through this digital infrastructure that's being created around our planet, which we liken to sort of a new Internet and all of the uh, data and communications that's coming off that is as impactful as the Internet was 20 years ago. And it's all happening right now. So that's what's happening now. Um, what is sort of on the sort of near term horizon is mega infrastructure in the space environment. And what do I mean by that? Well let's go straight to it. The stuff that Elon's talking about, data centers in space, this is um, something that is really now on the pathway. Um, and um, is a reality, um, and we're building towards that and we're going to get there in the next sort of five years or so. Starting off with um, um, uh, data centers that are effectively constellations of satellites that are linked together but sort of further out a giant building that is a data center. So that's the journey that we're on um, at the moment, but it is real. And then there are a whole range of other things that sort of go alongside that. So infrastructure in space, cell towers in space. You know this is a reality today. The cell towers are already there. They can communicate to any mobile phone, um, without any hardware or software adjustment. You wouldn't even know that your um, your call is being rerouted through space. So that's happening already. Uh, the things that are sort of on the horizon as well are uh, manufacturing in the space environment. So uh, effectively leveraging the zero gravity environment of space that makes every protein, every molecule behave differently. Experiments that are undertaken on Earth have a different outcome in space. What does that mean, different outcomes? Um, uh, and potential for drug discovery and different outcomes and potential for new materials. Thinking about finding ways of building synthetic Rare earth materials that our entire world is dependent upon. Um, these are the things that are now um, actively being worked on that sort of here today but are scaling and um, are going to become a reality a little bit further out um, in the same theme of uh, mega infrastructure is energy from space, bringing energy back from space back down to Earth so that we become less reliant on oil which we all know that we need to do for the future of the planet. Um, and uh, this is being actively worked on at the moment. So this is a financing game um, and financing issue rather than a sort of technology issue. And this is something that is now sort of insight what's sort of further out that um, you know is uh, is sort of still um, you know, not, not, not, not, not here today. This is sort of anything to do with space travel, anything to do with the moon, anything to do with Mars. You know all of that is still sort of way out. Uh, we're not investing into any of that stuff because you know we're using other people's money who are expecting a return over you know, reasonable period of time. So we're really focused ourselves as an organization on where space is able to serve Earth, uh, where it's addressing terrestrial problems, uh, and requirements, where there are real budgets, uh, where people are prepared to pay for you know, whatever can be provided from space. So that's what's here today. And there's a very clear pathway to the future of lots of exciting things that are going on beyond that.

Speaker B: So for those who may be kind of neopights to this topic, is SpaceX like the big silverback gorilla in the space and everyone kind of operates around them or are they just the biggest branded name that we hear a lot of especially as Americans and there are other players kind of at their level and kind of how does the competition of companies rank and stack? And I know there's a lot coming fast but like where does it all. Who's the primetime player?

Speaker A: Yeah, well of course SpaceX is you know it's a multi trillion dollar company. Um and you know they've defined the sector um and um, they're continuing to do that. Um, and you know Elon, uh, and the Elon premium is highly justified. You know, uh, growing Tesla and having a multi year advantage in EV. Um, uh SpaceX and uh, how it's revolutionized the launch industry over the last decade and is now a monopoly player in that sector. Um, uh the communications network of Starlink multi year head start on any other players in the market and now we're talking about data centers in space. Leveraging, low cost, um, abundant energy for Xai, you know, is the next step. And do, do I believe that he's going to enjoy a multi year advantage, uh, in that as well? Yes, I do. But what I sort of just Described there is SpaceX is part of the market, um, which is only in my view only about 20% of the overall space market. So it's the other 80% that really doesn't get much airtime that we're going to talk about today. Um, and um, this, this huge opportunity, you know, we have um, uh, made it our business not to do anything to compete against SpaceX. Why would you. There's so much opportunity in the rest of the market that what we have set out to do in our last 12 year journey as a specialist space investor is to find the other SpaceX. Um, and there are many of them out there and we've invested into many of them that I'm sure we'll come on and talk about in the show today.

Speaker B: Yeah, so, okay, so outside of that space, that and I appreciate you level setting because I definitely think for someone who doesn't follow this, it's kind of like the only name you hear is SpaceX. Maybe occasionally you hear about Jeff Bezos blowing something up but like you know, for the most part it's just recatching rockets and satellites from SpaceX and, and to the point that you made, you know, where um, I'm incredibly interested in, especially you know, here in the States because I know just my own, I get pound over that with Space X and nothing else. Right. And I would love to kind of say like what's the next hottest piece, what's the next thing that either needs to be built or something is someone's uh, building right now or that you're invested in. That's, that's kind of filling that other 80%. What are you most excited about?

Speaker A: Yeah, well before I answer that, let me just give you another sort of um, sort of level, uh, setting sort of uh, view. So um, you've got SpaceX, the world knows what they do and they're excited about it. And um, uh, I doubt there's many people who don't know and most folks um, who are lucky enough to have an exposure to SpaceX, particularly those that invest while it's private, consider that they've actually got their exposure to space. But that's not true for the reasons that I've already explained. So if you think about AI and I'm going to come and talk throughout our conversation today about how space is very similar to um, AI. Because it's a horizontal technology. Yeah, AI is not a sector. Space is not a sector. Um, what it is is an enabling technology that enables a range of themes and a range of underlying industries. And there isn't a theme or an industry that both AI and space um, don't um, impact. So um, you can't say that you've got an exposure to SpaceX, so to space market by only having a holding in SpaceX. You can't say that you've got your full exposure to AI just by holding, uh, Nvidia in your portfolio. And no investor would sort of say, I've got Nvidia. There you go. I've done AI, I'm done. They recognize that there's other ways to play that market. We haven't yet got to the stage where investors are sort of saying, right, okay, I've got SpaceX, you know what next. So this is why your question there uh, is so pertinent and it's really interesting then to start sort of digging into what are the other areas. Uh, so let's do that. So um, let's start off with um, uh, Earth Observation. So Earth observation, um, is um, a market where um, from space you're able to look down at Earth and use um, a different type of sensor or many different types of sensors to tell you different things about what's going on on the Earth. So there are just uh, endless applications for how this can be used. Let me zero in um, on one of our portfolio companies which provides a really good um, uh, basis for this discussion. So this company is called ICE I is a Finnish company. And what they uh, have done is they've developed a miniaturized satellite with a miniaturized radar. Um, and what they do, um, uh, with those satellites is they're able to, from space, look down at Earth, um, and see something that's the size of a pizza, um, from space, day m or night. And they can do that uh, through any kind of weather and any kind of cloud cover. And They've got around 70 satellites that are operational right now and they're able to see every square meter of Earth every hour. And what they then do is they then do change detection using AI algorithms to determine how that square meter of Earth has changed in that last hour. And uh, they're then able to build up a picture of change in the world at a level of um, resolution that's never been seen before. So what happened on that spot an hour ago, two hours ago, 10 hours ago, a day ago, a week ago, a month ago, a year ago. And then effectively to be able to leverage that digital information to provide insights of what has happened or what might happen going forwards. So right now the big use case for that is defense. But every industry will use that as uh, uh, just a baseline data, uh, in the same way that every single industry and every single company uses GPS in a myriad of different ways.

Speaker B: Okay, so this is the kind of stuff that I was excited to talk about because I'm sure half the audience is scared out of their mind because they feel like people are going to be watching them drink their beer in their backyard at night as they're winding down. And the other half is like, oh my God, think of all the amazing things we can do with this. And I'll tell you from a, uh, non military standpoint, so my home industry is the property, uh, casualty space, uh, insurance space. And um, I think about when I hear something like that and I hate that I'm this nerdy and I'm sorry guys that I'm this nerdy, but that's who I am is like, I'm going, wow, from like a claims perspective, think about what you could do if you could like literally rewind the tape and watch the fire happen, watch the tree fall, watch, you know, something like this happen as it evolves. I mean, I know now it's once every hour. I'm assuming over time it'll be once every half hour, once every 10 minutes, and then they'll just be watching all the time. And like to be able to, to be able to handle these things in a fraction of a second where you know, you see the tree fall, you see the damage, the satellites are able to easily assess, run a replacement cost algorithm and the person, you know, the insured has the money for the, for paying out the claim in their bank account like 15 minutes after the, the tree hits. You know, I mean I, obviously, I'm talking a little far out in the future, but I think about this stuff and I'm like, guys, that's the non. Like, I, uh, I know how my audience thinks and, and they tend, I love conspiracy theories. So we do, we do tend to go down that rabbit hole every once in a while. So I will say I get where their thoughts are. But like as much as maybe pure milit, the military tends to. And this is, I just want to say this, I find it interesting and I want you to push back on me if you have different thoughts. I know a lot of this stuff tends to be brought to market via military need and, but that's history guys. That's like literally almost m. Every major technology that we use today was initially implemented for military use as you described here, but then brought down as it becomes commercialized and being able to use in everyday life to improve how we operate. And that's why this stuff is so incredibly exciting.

Speaker A: Yeah, you're absolutely right and you've really put your finger on it there because um, you know, insurance, uh, in the case of isi, is their sort of second largest customer base. And one of the things that insurance are really sort of uh, challenged with at the moment are the sort of uh, events that are sort of climate driven. The fires, the floods, the tornadoes, et cetera. So I mean just taking the example of a flood, what they're able to do as an insurance company now in real time is to understand the perimeter of the flood as it happens. They can then identify all of the assets that are subject to that flood. Cars, houses, industrial buildings. So when it comes to a claim, they have a source of truth. So it eliminates fraud. They know immediately whether that property was subject to, you know, a meter of water for a week and they can automatically pay out before the claims even made. And you really made the right statement there that um, you know, the event happens and the money's already in the bank account, you know, which show as, as the sort of consumer of that insurance. That's what you need. When your house is just, you know, underwater and your world is upside down, the money's in the bank. You know, you're buying a new house, you're paying for all the things that you need to pay and you know, you're not chasing your insurance company and providing evidence that naturally and currently just runs months behind the event. Um, so you know, and we've just talked about insurance, but play that into any industry. This is a uh, foundational data set that is going to change everything.

Speaker B: Yeah, I mean you think about it from forestry, um, animal migrations, you think about um, uh, planning farmland, uh, managing uh, different machines. You know, we already have kind of GPS driven machines on farms, but you know, even from some of the people that I know that use that on a small basis, those aren't perfect and you need more of the visual elements as well to manage smaller uh, turns. I mean there's just so much use case for this kind of stuff.

Speaker A: Let me just pick up on something you just said then about gps, right? Uh, because this is kind of fun. I think you'll like this. So, uh, gps. Yeah. So GPS defense driven, uh, capability, uh, that's now really been embraced commercially in every industry around the world. And we all use it as a utility, uh, every single day. But you know, in reality uh, GPS sucks. It doesn't really work very well. It's not accurate. Sort of 1 to 10 meters, um, uh, is the best you're going to get. Um, and then um, you know, it's completely unsecure so it's easy to spoof and you can't actually rely on the data because you just don't know whether someone has been playing with that satellite uh, to manipulate you. And that is a really challenge for our uh, autonomous future. You don't want to be uh, driving or not driving an autonomous vehicle that um, is meters out in its accuracy, that's you driving down the wrong way of the freeway. Uh, so this next generation gps, uh, uh, that's happening right now, Company called Zona, uh, it's a Californian business, um, they've uh, developed a low earth orbit GPS um, network. It's centimeter accurate and it's built from bottom up to be military grade secure. So this is what our autonomous future requires. Autonomous cars, autonomous drones, all of the robots that we're going to be relying on, increasingly humanoids, all of them need that accurate GPS capability. Um, if you think about sort of um, you know, your waymos with uh, all these sensors around the, around around the car, you can't take those sensors and put them onto a drone. You can't take those sensors and put them onto a robot. It just doesn't work. We need the GPS to be more reliable, more accurate. And guess what, that's coming right now. So um, you know, this is another sort of driver from the Constellation play that we're talking about that's going to start changing our world very quickly.

Speaker B: Yeah, GPS uh, kind of pissed me off the other day because it mis, clubbed me on my, my golf app that I have that gives me my yardages on GPS and had me about 10, 10, 10 yards too long and I under clubbed and you know I'm joking, I did actually do that, but that's a trite example. Um, you know, it's the small things. Right? All right, so um, I don't want to take us off of talking about the other things for a second, but there's one, one kind of idea um, that I just want to clean up. So you mentioned a low earth orbit, maybe just, just for purposes of understanding, for an audience that may not get like how does it, how do these satellites work in orbit? Like low Earth ver or low uh Earth orbit versus higher. What's the difference? Like why would one be. How does all that kind of work?

Speaker A: There's three orbits. Low Earth orbit, um, is um, uh where most of the new satellites are being built in. So this is where um, the International Space Station is um located. And this is where all of the EISI satellites and all of the uh, satellites that Starlink uses, um, so they are the nearest to Earth. So they're able to uh, you know, communicate better and provide better visibility. Um, it's cheaper to get the satellites into that the nearest part of the Earth. They're all traveling around our planet, uh around 17,500 miles per hour. So uh, you need a lot of them to provide coverage. And this is the reason why you've got um, Starlink there with more than 10,000 satellites. But each satellite provides a sort of global coverage. So you can actually get sort of hourly revisits, daily revisit with uh, a satellite constellation of about 18 satellites. Because all of those satellites are constantly um, uh traveling around the world. And this is why it's such an exciting uh area to invest into because you immediately get a global product um as soon as you build your initial constellation. So that's low Earth orbit. You've then got mid Earth orbit, uh meo uh as they call it which is where most of the GPS satellites are ah based. It's higher up. It means you don't have to have as many satellites to provide that same level of service. Um but you pay the price for that. That's the reason why the GPS is not so accurate because it's so much further away that um, this is the reason for the sort of accuracy um uh, uh, uh uh issues. And then finally you've got geostationary orbit. So you've got a communication satellite that sits above New York. And um, as the world turns it's in the perfect position so that as the world turns it stays above New York the entire time. So that's really where all of your traditional satellite for communications have been. And this is really the sort of was historically you know the most valuable um assets within the space environment. Because um, there's only so much real estate of these particular places above these particular cities and countries. And uh, all of that's been carved up by uh, regulation and um, and and spectrum. So this is why um, this sort of new market which is really where all the growth is and really where we are mostly focused as an investor is in the lower Earth orbit. That's really where all the new space activity is underway.

Speaker B: I want to ask you one more table setting question before we get back to new tech which is how does the politics of all this work? Like, like is there a satellite traffic control? Like how do. If I want to send. I'm uh a, I'm a startup company and I come up with my 18 satellites that are going to give world coverage for whatever functionality I want to deliver. How do, how do I determine like I guess who even is the, is it NASA? Is there a, is there a, is there a global organization to say like this is where I'm going to set them, um, so they don't run into you know, someone else's satellite. Like how do they, are there, are there satellite traffic accidents? Like how does, how does all this working up there.

Speaker A: So regulation is sort of challenging um, in the space environment where it works really well is in the communications market around this geo communication band around the Earth. Uh, this has taken careful coordination and uh, all of the countries that um, participate in that recognize that if they don't play to the same rules ultimately they'll all uh, uh, negatively impact each other. So regulation around spectrum use and um, how that works within the communication market has worked for 50 years and it survived the ups and downs of um, geopolitics and um, it largely works beautifully and it's a great blueprint for the future. Um and um, everything else is a bit more like the Wild west because um, what it, what it really relates to is um, you are as a satellite operator you are governed by the laws of the country that launch you. So if you don't like the rules of that particular country, find one that you uh, that you do like and launch from that country and sidestep all of the rules that you um, you would prefer not to abide by. So this is the reason why um, you know, other markets such as um, um the uh, Earth Observation Market are more sort of Wild west at the moment. And it's going to take a number of years um, for uh, for the regulators to sort of coordinate and work. And if you think about, so closer to home, think about you know, social um, media and how the regulators have been trying to regulate um, that where they're collecting huge information about our uh, personal everything that we do. And you know regulation has been really focused on that for 20 years and I think we could argue that there are still massive holes in that regulation and it's not quite yet fit for purpose. I think that this sort of space environment and regulation, you know, is on a similar sort of timescale and trajectory. Um, and um, you know, I think so that, so that's got sort of positives and minuses. Um, but what's really happening um, in the reality of the world is that all of the commercial players recognize that if they're not good corporate citizens that they are actually going to uh, ruin their own commercial market opportunity. So what you do see is the market largely behaving as good corporate citizens. And then there are a whole range of uh, new technology that is a real enabler for how this market is working. So we've been investing in the um, foundational capabilities um, that really enable the sort of um, cooperative commercial use of space. So let me give you an example. So ah, we've got this amazing company called LeoLabs, another Californian business. And what they have is a broad range of ground based radars. And what these radars do is they look up into space and they can see something the size of a coin from 1000 Ah, kilometers away on Earth into space. And that coin is traveling around our planet at 17,500 miles per hour. And there's about 500,000 pieces of debris and satellites in the space environment. And what they're doing is they're tracking them in real time so that they can provide a service to the operators within space. So they can say to them, your satellite is on a collision course with this piece of debris or this other satellite and you've got you know, two days to move yourselves out of way. Or alternatively those um, users can actually autonomously ingest that data uh, and autonomously move those satellites so that they are not in any danger. So the way to think about this is effectively these guys have the Google Maps of space so you know where everything is so that you can then chart your pathway through um, uh, all of the space. So now that that data is available, the regulators need it, the satellite operators need it, the insurers need it so that they can all operate and work in harmony. And guess what, it's created a multi billion dollar market opportunity that um, that, that we're investing into and, and, and so many others are. And then from that data set, in the same way of uh, of Google Maps, there's giant businesses that you can build on that data set that provide services and capabilities for managing the space environment.

Speaker B: Yeah, I, I can see why you're so excited about this. And Again, this is why I was so excited to you. It's like you're, it's, you can see all the cottage and I don't mean to be trite with cottage, but cottage industries that form up around the general energy, communication, you know, these major functions that we want space tech to provide and then all the cottage and the TAM associated with them of actually managing them. Like, you know, I'm thinking to myself like, is there eventually like blue collar space work where like I'm up there, you know, oh, hey, I put on my space suit and honey, I'll be back tonight. And boom, up I go and I, you know, tinker with some satellites and I take some trash out and you know, fix some things and push a satellite there. I am being a little, you know, I'm a little facetious but you know, you know, I'm saying like is there, is there eventually a time where like, and I'm assuming when that day comes it's more robots and stuff, but like essentially blue collar work that needs to be done up there every day.

Speaker A: We're here today, we're already on that pathway and you uh, know just to sort of um, you know, give, give your listeners more of a, sort of an interesting view of what's going on. Sort of picking up on your word cottage there. So um, if you think about all of the thousands of employees of SpaceX, um, who I don't know what the average age is but it's sort of in 30s and I think it's sort of towards the bottom end of the 30s.

Speaker B: Yeah, I think, I think I said 32 or 33 is what I heard,

Speaker A: certainly in that range. And you uh, know all of them have just made a fortune. In fact there was 400 of them that made more than 100 million. So um, all of these guys have been through the University of Space, SpaceX, the University of um, doing things quickly and efficiently and you're breaking things and trying to make them work, um, and using um, 3D printing and using components from other industries and just pulling things together and moving quickly. So what we're going to see as a next wave of innovation in space is that all of these um, current employees, ex employees, these are not the kind of people that are going to take their money and go and sit on the beach. That's just not what they're going to do. Yeah, they might take two weeks off, but what they're doing during that two weeks while they're on the beach is they're thinking about all of these Things in space that we're, we've only really just started to touch on. You know, we can go a lot deeper and hopefully we will in the call today. And they lay there on the beach, they're thinking about the money they've got, they're thinking about what's next for me and then they're thinking, right, well I'm going to go and do this and I'm going to finance myself to do it through the seed round and a round and then they're going to uh, you know, prove their businesses to get to a certain stage before they then start to bring in investors like me who will then finance the scale up of those businesses. So that is going to now be happening on, on an incredible industrial scale. And I've just given the example there of, you know, SpaceX employees, but you can take employees of any industry that have really started to understand the implications of what's going on here. To sort of go back to the analogy that I was making earlier about space is very similar to AI in that um, it's a facilitating horizontal capability that impacts every single theme, every single industry. So you've got people who are in the automotive industry, in the oil and gas industry, in the maritime industry, in the logistics industry, they've got their head around what's going on in the space environment and then thinking, right, I know exactly what I'm going to do. I'm going to create a company that provides this capability that builds on M, that data set, uh, that's going to provide a service that doesn't exist today, that has the potential to provide, you know, a billion dollar market time that simply doesn't exist. That's what's happening now at industrial scale.

Speaker B: I love it. I mean, you know, it's funny, I uh, get um, a lot of the negative comments that I get associated with this podcast is that I'm an enormous AI and just in general techno optimist. Um, I operate from that viewpoint for two reasons. One, just my personality is that of abundance and optimism in general and just in life. But two, like I don't, and I've shared this on previous shows when I do the M mental math, I don't see a, I don't see any value coming out of pessimism or trying uh, to go back to some Luddite version of our world where we're like what, hunting for our food every day? Like I think it's hilarious when people are so anti tech and anti. And I'm like, yeah, but you're, you're you're complaining about technology on your iPhone connected to your GPS, Wi Fi Internet that's you know, tapping into 17 different layers of AI to produce the uh, signal quality that's delivering it to X to tell everyone that technology sucks. And it's like I, you know, I sit that mind space. I'm like, I just, you know, I don't know, I can't rationalize that thought. So that all being said, you know, this feels so incredibly positive to me, yet it also feels like so many people dismiss this market. Like the SpaceX happens, it's fun, it's in the news. Maybe people try to buy a couple shares or whatever and either hate Elon or you love Elon or whatever your take is. And, and okay, and then that kind of passes and I feel like people just go back to you know, what are we going to be? What are we going to be mining asteroids, Mark? Like uh, what, what am I going to take a vacation on the moon? And like the answer to that is yes, right? I mean that's, that's the part that I think is crazy. And, and you kind of level said it before like this stuff is happening now. Like this isn't all sci fi, futuristic, hey someday we'll have flying cars thing. Like these are literally things that are happening in this moment that we're sending rockets up right now with these satellites to produce this functionality. So let's, let's go. I want to go. Um, I feel like you gave us two examples of, of new tech, new ideas, new functionality that um, feel very tangible and rational. Um, what are some of the things that you see coming, even if they're early stage, that are like this is going to change the way we think about how we operate, what we do, you know, like just, maybe just our place in the world. Like what are some of these? Because I really think space unlocks a mindset that, and not to be too woo woo, but like to your point how well the space community gets along with each other internationally it and you hear this from every, every uh, astronaut that goes to space, from every country, comes back with this more globalized, humanized feeling. Like this really feels like a group of technology that could bring the world together eventually. What do you see that's, that's, that's out there that kind of people might not even realize is coming that could change that?

Speaker A: Well you know the big one to go straight to is uh, energy generation in the space environment that is um, brought back to Earth. So this is a um, financial problem, not A technology problem. Um, and um, um SpaceX comes back into the story here because of their new vehicle Starship. So Starship um, is uh, they've done 12 test flights. This thing's now ready for sort of commercial um, capability. Um, it's ten times bigger uh, than the Falcon 9 in terms of its capacity. Falcon 9 has been the workhorse for the last decade. This revolutionized the space industry. Already you're now talking about a vehicle that's ten times bigger. Um, the pricing's not yet been set but the market tends to believe it's going to be about a tenth of the cost of the current market. So ten times bigger at ah, ten times less. And SpaceX are saying there's going to be something like the 200 of these per year. So what that does um, is it completely removes the uh, cost barrier of lifting large amounts of equipment into the space environment. So previously none of the business cases closed because of just the pure cost of lifting massive amounts of infrastructure into the space environment. So that no longer holds. So it's a little more expensive taking stuff into space than it is putting it on a, on a plane or a train or a, or a truck and moving it from A to B. So uh, so this is the period that we're now in. So uh, there are in fact last time I counted there uh, was about 15 companies that are all focused on um, uh mother sizing um, energy um, from space back to Earth. And the vast majority of them take the same approach as to how they return the energy back to Earth. And that gave me a lot of confidence that um, you know these are a lot of smart people that are all sort of agreed on how they do that, which is um, using microwave to actually move um, that energy from space back down to Earth. The University of California about two years ago now put up a satellite um, that proved that they can do this transfer of energy from space uh, back to Earth. So uh, so the sort of technology, sort of capability proven, um, now this is a sort of scale up exercise.

Speaker B: So and M Mark, I don't mean I'm sorry to interrupt you but just on the microwave piece just to give. So essentially just there, there would be beaming a, a direct what, what is it they are using heat or like what, I guess what maybe just so people understand what that means, like it's not a laser beam or something, like what is that?

Speaker A: Um, it's moving it down in um, uh effectively I don't know how best to describe this, um, in a sort of microwave ray um, which is a frequency.

Speaker B: Right. That's like a. That's okay.

Speaker A: Yep. And this is the sort of chosen solution rather than doing it with like a laser, which would ultimately be a giant weapon from space. Yeah. By using this approach, you can't weaponize it. So this is purely for um, the good of Earth rather than the bad of Earth. Um, and it's something that's known and understood. Um, and um, the big thing that we need to ensure is that um, anything that's within that um, beam, um, is not um, negatively impacted. And um, this is work to be done. Ah, when you're doing this at scale and there'd be um, the regulation that's required um, around this. But ultimately what it will end up with is um, rather than having solar farms as we have today, they'll look like solar farms, but they'll actually be microwave farms that effectively are just receiving the microwave energy um, from space. And there'll be um, areas that are mapped out, um, so that planes and um, others can um, be aware of these areas, um, ultimately to provide this safely and securely. Um, this is an area that um, you know, is now something that is a um, real potential capability. Governments around the world are recognizing the uh, importance of space, how space is becoming critical infrastructure. And this is just the sort of next step. So you know, ultimately you can imagine a scenario where each government at least wants to have a certain element of their own power generation under this control. So I think that this is a space race, uh, um, that we're at the very beginning of now, um, that is ultimately going to be hugely beneficial for humanity. Right now we're still having wars around oil, which is something black that you dig out of the ground. I mean it sounds like it's medieval that we're still, you know, running our global economy on things that we're digging up out of the ground. You know, wow. You know, so. So this is a solution to that. And I don't see many other alternative solutions. This is a permanent energy supply.

Speaker B: What is the capacity of this type of energy generation to like actually take over? Like, is this something where, if we did this correctly over 25 years with focused effort, we could remove 90% of the fossil fuel energy generation. Like, does it have that level of

Speaker A: capacity or so I don't have the stats and anyone who does is making them up. But yeah, you know, this is the pathway that we're on. The great thing about space is there's lots of it. So if you think about competing, um, uh, countries or country uh, or companies that are setting up giant effectively solar farms in the space environment. There's plenty of space for it to go around. So ah, ultimately I believe that's a pathway that we're on and uh, it's one that I'm certainly on as an investor in this area. And um, I believe that um, we're in good shape to um, really demonstrate that this works and is scalable within a relatively short period of time. The prize is so big that um, you know this is, this is a race worth uh, worth going for. Um, let me, let me carry on down the sort of energy theme because I think this is um, this is fun. So um, yeah, you know uh, uh, nuclear is a, uh, you know is a, is, is a, is a, is a great um, energy supply and nuclear in space is not new, um, you know, used in the sort of Apollo missions, um, but really not developed thereafter. Ah, we've invested into a company, uh, called Zeno, um, uh, that um, has taken traditional um, or energy uh, um usage of uh, nuclear and they've brought it to the modern day. So they've effectively created a nuclear power battery, something the size of a microwave that provides a 10 year uninterrupted power source. So um, if you think about the impact that that um, could have um, uh, on Earth, um, it's huge. You know, think about how that would power uh, planes, uh, trains, cars, boats. Um, think about how it could um, power buildings, uh, in remote areas. Um, it's a reliable modular power source um, that just naturally over time in the way that sort of technology develops something that's the size of a microwave today, you know, what's the size of that going to be, you know, in ten years time? Uh, you know, are we going to you know, have tiny versions of that in our watches or in our mobile phones? Um, you know that is the pathway that this um, technology is on. And um, it's really interesting that um, we're coming across these opportunities as a space specialist investor. What we're doing is we're saying right, where does space intersect with other frontier technologies? Where does space intersect with quantum? Where does it intersect with nuclear? Where does it intersect with blockchain? Where does it intersect with biotech? And then we hunting the world to find the companies that are the category emerging leaders that are answering that question. And then we're putting money into those businesses and Zeno is one of them. And it's amazing, you know this, their first products are uh, in market this year in, in this, within this uh, within the next 12 months. You know, this is not something that's futuristic. This is something that's here and now.

Speaker B: I'm so glad you brought that up too. You know, one of my biggest complaints with the entire uh, climate industrial complex is the lack of adoption of nuclear. I mean it just, this is between, between space based solar, which gets all these crazy, you know. So I live in New York State and there's a major political um, issue happening now because of, we have one of the largest national parks in the entire country in our state, in the Adirondack State Park. And you have, our state government is selling plots of land to um, foreign solar farms. And now you see areas that have been protected for a century, um, now just being ripped and replaced with these disgusting solar farms that then, you know, aren't kept up. And after about five years they look like, you know, something out of a zombie movie. And it's disgusting and gross. And you know, then you have these wind turbines and there's still, you know, I mean, obviously China, but there's still a lot of countries burning coal. And I'm like, man, if we could just, if we could just replace wind and coal, just those two, the ecological improvement that we would see AC around the world, not to mention the scalability of energy, would be insane. And you know, one of the thoughts that I had and I was going to ask you was like, is there a place? So the argument is always nuclear is amazing, except no one wants it in their backyard, right? No one wants to see two big smokestacks. I know Gen 4 reactors are not nearly as big and as ugly and you can almost kind of hide them inside a building. But is there a place for these reactors in space where now maybe we're getting that energy generation, being able to extract it without the idea of like if a Three Mile island happened, which we know, you know, no one died and whatever, but like it's happening, you know, 20, 20,000 miles up in space or wherever, you know, we don't have to, it's not as much of a concern. Like is that, is that a technology that's coming as well?

Speaker A: A uh, big yes to that. So putting nuclear to one side, let's just talk about dirty industries, of which there are many that are uh, producing products that we all want and need. But you know, with every pair of um, sneakers that's produced, you know, uh, there's a price to pay, you know, for the, you know, for the world, uh, in terms of sort of the climate impact. So um, we are in an era. Um, and again we've invested into companies that are already doing this. Uh, Voyager space systems, space manufacturing platforms. What's the first things that are going to start being lifted into space? Well it's dirty industries that are polluting our planet so that we can continue to uh, do that and provide the goods and services that we need from these dirty um, industries. But they're in an environment that's not harming our precious planet. So there is going to be a sort of tipping point where the regulators will come in and sort of say hang on, we're not going to build any more of those particular types of plants because we now know it's possible to do that in a different environment that's not going to hurt all our ah, world. And over a period of time there'll be regulation that will come in and just say you know, no, you know, you can't build a um, factory that is uh, you know, going to provide this level of pollution. You know, move, move it to space. And um, we're on a pathway for that happening. And it all goes back to what's the cost of getting the equipment up there.

Speaker B: Um,

Speaker A: and there are an increasing range of alternatives to rockets. Uh, to think about how we uh, start moving that. And ah, that is even before we've moved to a scenario where we can actually start to use resources from the space environment. Right now what we're talking about and all the things that I've been talking about today because we're really grounded in the reality of where we are now. And ultimately I'm grounded in the reality of how do I make money out of this. Um, but what, what the, near the medium term future is that ultimately um, you know, you go and dig a patch of the moon and get the soil and put that into a 3D printer. And um, you know the, the things that pop out of the other end of that are the, you know, the, the, the solar um, uh, uh, uh, panels that you need to build out, you know, the, the giant solar farm. So we're going to be transitioning to no longer being reliant on having to lift everything from good old planet Earth. When we get to the next stage of being um, able to sort of use the resources that are available and, and, and more available than they are on Earth. You know, space is huge and infinite and um, at some point we're going to start being able to sort of leverage um, those numbers. Which takes me back to sort of, you know, the SpaceX thing again. Um, you know, about the the size of the TAM that they set for, you know, what's the size of the market? I think it was 266 trillion I think was the figure that they used for the addressable market. And hopefully, you know, from our chat today you can see actually, you know, is that that crazy? You know, no, it's not because um, you know, all of these things are really high value and um, you know, as you start peeling the onion of the conversation that we're having right now and getting down to the next layers, you can really see that there is not only massive amount of money to be made and again I'm a red blooded venture capitalist and that's what you know, my aim is. But ultimately there's going to be a huge amount of good to humanity that's coming from all of this as well.

Speaker B: I think some people, certainly not the listeners of this show, but I think some people would hear the idea that like the kind of capitalism in your voice and they may be like, oh well, I don't trust these people. I'm like when we get rid of the energy issues, when we're not fighting each other over energy or resources on the planet because we can send a rocket up and mine an asteroid or you know, uh, or another planet or another object that's floating through space and we don't actually have to fight each other through our borders. I think capitalism is ultimately the driving force and to get us working closer together to get us to stop bombing and killing each other on this planet. And I think that when that turns and again I'm an optimist that it will turn. The expansion here is 266 trillion. Is could be light and it could be light by a factor of, you know, 10 of 100. Because when you start thinking about, you know, are there, are there mining operations being sent out to you know, the moons of certain, of certain, you know, of Saturn or Jupiter. You know, I know they just found, I read something, they found some element that's really rare here on some moon of Jupiter. Right now they're, now it's, hey, can we put together a robotic operation to go and just get samples and see what it would look like to mine that moon and bring that back. Okay, great. Well you know, I think about that and I'm like the, the and I know this gets a little woo woo again but I just, where my brain goes is like yes, this stuff is important, it's exciting, it's interesting. Especially if you're a nerd. There's a lot of Money to be made. But like there's also all of these ramifications to, to our individual societies as well as our global. And, and then it's like that unlocks everything. Now we're not fighting with each other and it's just pure what can we build how fast and how far? And to that end I guess we wouldn't be doing, I think I'd be doing the audience a disservice if I didn't ask about like, okay, we've talked near term reality. You know, you said how do. I'm most focused on things that let me make money today. Which makes complete sense. We've talked a little bit about medium term stuff like what are my kids gonna see? Right. I got 10 and 12 year old boys. You know, let's say they're, I'm 45, you know, like let's say they're my age, they're 30 years from now.

Speaker A: Like

Speaker B: I know you're just kind of shaking the crystal ball but like what do you see or what are you hopeful of is part of their everyday world or at least something they're experiencing that may sound crazy to someone sitting here today.

Speaker A: Yeah, you know that's a, that's a really hard one to answer. But you know, I think that um, you know, the pace of technology development um, is just about to move up several gears, uh, which is enabled by AI, um because um, we're using machine intelligence to help us to evaluate vast data sets that were beyond human ah, capability before. So I think that within next 10 years we're in this period of very significant technology developments. If you think back over the last hundred years about you know, what, what's been sort of um, developed. You know, you've got sort of electricity, you've got the car, you've got sort of the telephone, the television, um, and things uh, like Concord. Um, um. But you know what, apart from the iPhone, what's the big thing in the Internet? What's the big thing that's happened in, you know, our uh, recent lifetime? Uh, not a lot really. Um, I would say so. I think that we're very much in line for, you know, something as big as the television, electricity, um, to, to come over this time frame and I can't even begin to articulate to tell you what it is other than of course I know what they are and I've already invested into them. Um, but you know, that is the scale of the change that I think is coming. Um, because we're sort of overdue, um, some world changing Technology development that is going to change the life of every single person on the planet. And because um, uh, effectively I believe that this is going to be enabled, um, um, by AI, uh, facilitated, uh, by space. You know, I think that there is going to be a sort of snowball of uh, really incredible things. I think the one that is going to be upon us sooner rather than later is um, around the human genome and uh, the ability to be able to sort of crack certain things, uh, like you know, disease, like um, um, age, aging, um, and um, you know, I think that um, you know, that that is just a sort of ah, a problem in a box that can be solved, um, and that will be solved quickly. So um, you know, we're probably going to be um, around with taking pills and watching our children in the next 30 years enjoying some of these um, new innovations that um, are going to change, are going to change our world. So I guess that hasn't really answered your question, but I think that that's uh, that's where my mind is on this.

Speaker B: Yeah, I guess. Um, and I want to be respectful of your time. Um, I'll finish with this, with this question, um, and take this as far wherever you want to go. Um, you had mentioned Quantum before and you know, do you think that, and I know you're tangentially involved in different ways. Like how just from, from, from what you've seen in, in your space and looking into the space as an investor, like how real is, is, is quantum tech to being able to, to, to take AI, space travel, energy generation. Like it feels like this thing that you hear about and we hear, you know, this computer now went from 1 second of comp thought to 5 seconds and that changes its ability. You know, like is this, is this just. Is it, is it, is there any practical application? Is this like a pure unlock when we start to figure out how this technology works that takes all this to another level we can't even imagine or uh, like how does that layer in? Because it kind of feels like we had, you know, we had the Internet and digital tech and then we got blockchain. And I know AI has been around but now it feels like AI is layer on top of blockchain. And then like quantum feels like that next level of almost unimaginable tech that that is coming but not sure how tangible it is yet.

Speaker A: Yeah, you know, it's upon us and you know there are a lot of um, companies out there now valued in tens and hundreds of uh, billions of dollars that are sort of at the forefront of this area, governments around the world are putting very significant monies in to make sure that they're sort of early in being able to sort of leverage the powerful compute capability. So I think where we're going to start seeing it first is around sort of cybersecurity. You know, this is one of the things that's sort of unraveling, um, our world, uh, you know, the threat around, um, cybersecurity and um, you know, just the huge negative impacts, um, around that, you know, we've all moved our entire worlds, um, um, digitally, our bank accounts, all of our passwords, you know, everything that we're doing on a sort of daily basis and uh, how our lives are sort of um, structured, you know, is at threat because of cybersecurity. So I think the sort of first practical thing that um, we're going to see as a real benefit of um, Quantum is around addressing the cybersecurity issue. Um, that's really where I see most value, most immediate impact and then most of the sort of focus about, you know, where, where, where this can be used. And then, and then really the sort of next stage really is about just um, superpowering AI so that the you know, the sort of um, capability of it goes um, you know, way, way beyond, you know, an equivalent of uh, you know, human capability. And it's what the unlock is. Um, if we are able to put AI onto steroids, you know, what, what, what does that enable? And um, you know, I don't, I don't think we're that long away from that. Um, it feels that all of these technologies are converging at the same time. You've got quantum, you've got AI, you've got space. And you know, I think in particular those three elements, as you bring them together, that's where it's going to be the nucleus of the, of the big things that happen next.

Speaker B: So incredibly exciting. I know there was a portion of my audience, I was hoping you were going to say like quantum wormholes so we could like jump to Alpha Centauri. But um, but no, I, I, I appreciate that a lot. No Mark, this has been phenomenal. I mean this, this sector is so incredibly intriguing to me. Um, I don't, not a scientist, nor am I particularly, uh, well invested in the space, um, other than picking up a few shares of, of Space X. But I follow it pretty closely and, and just it's so exciting to think about what could come out of this and, and why I was so happy to have you on the show and have this conversation is hopefully what it did was open people's eyes to the reality like this is at your fingertips. This is things that aren't just you know, 30 years ago or you know, some sci fi movie. Hey, you know, maybe this will happen. Like this are, these are tangible things happening right now that are impacting our world and that are coming on like gangbusters. And uh, I appreciate it, I appreciate you taking this time. I know there's going to be people who want to get deeper into your world, learn more about your fund. Where do they do that and how do they follow along? Do you create content in places that uh, could uh, be good for them to follow along?

Speaker A: We're available on Seraphim vc. Um, we produce an awful lot of thought leadership and publications talking about the investment side of the global space market. Uh, we run a range of funds from public funds and uh, ETFs, um, through to uh, private funds on venture and um, accelerators around the world. So we've invested into more space companies than any other investor in the world. We launched the world's first space fund. So yeah, we're a good source of um, what's going on in space. We've got a newsletter that people are welcome to sign up to and um, that should give everyone sort of um, another layer of information about what's going on. In our one hour conversation here, I think we've managed to peel one layer on the onion and there's another 20 layers to go. So um, this is what's great about space. It's why you know, um, I love the market that you know, I'm operating in. It's the reason why I join um, podcasts like this to sort of spread the word. I'm an evangelist. I want people to understand what's going on because uh, it's huge and people should be aware of it and, and it's all around us right now. The world has already changed and uh, people just uh, need to catch up as to where we're at. SpaceX has been a brilliant um, uh, first space company to capture the world's imagination of what's going on. Elon is fantastic and keeps pushing it, talking about Mars and millions of people and how the world's changing. I'm sort of the more sober, sort of uh, opposite, um, which is, I'm trying to say, yeah, SpaceX is fantastic, but look at the other 80%. Get your head around all of the other SpaceX is that are being created during the course of this decade and where are they going to take us next? And, um, yeah, this is why it's such a, such an interesting area to talk about.

Speaker B: Uh, I appreciate you. I appreciate that you're out there evangelizing because I'm with you. I'm. I'm a techno optimist. It's a big part of what we talk about on this show. And I think it's important that, uh, more people hear positive messages about the technology that's coming and the people that are building it. Thank you so much, man. I appreciate you. Um, this has been phenomenal.