Dennis Woodfork: Entrepreneurship in Space Exploration

On this episode of The Inc. Tank, host Christina Elson talks with guest Dennis Woodfork about new opportunities that are emerging for the private sector in the space industry.


Full Transcript:

Christina: Hello, I’m Christina Elson, and on this edition of The Inc Tank, we’ll be discussing the growth of entrepreneurship in the space industry, and we’ll explore new opportunities that are emerging as the private sector moves further into the business of space exploration. My guest today is Dennis Woodfork. He’s an expert in the space industry. Dennis also is a graduate of the U.S. Naval Academy, and the Robert H. Smith School of Business at the University of Maryland.

Hi Dennis. Thanks so much for joining me today in The Inc Tank.

Dennis: Thanks for having me.

Christina: Now, I have to tell everyone that Dennis and I go back a few years. We first met in the executive MBA program at the Smith School of Business. I’ll just say, if anyone’s looking for a top 10 executive MBA program, check out University of Maryland.

Dennis: Go Terps.

Christina: Go Terps. Dennis and I had a great time in that program. That’s where we go to know each other, and we’ve been talking a lot over the last years about what Dennis has been doing in the space industry, and I’m just super excited that he’s here today to help us unravel some of the really fast-developing aspects around the business of space, because there’s a lot of new stuff going on there.

So, Dennis, give us a little bit of an idea of why space is becoming a business. So, in the past, you know, when I grew up, space was NASA, and Dennis worked for a few years at NASA, but I thought of space as like, “Well, it’s NASA. It’s the government. It’s a nation. We’re gonna beat the Russians,” but that’s not really the case anymore. So, help us understand, like, why is that changing?

Dennis: That’s a good question. There are, I think, several factors that play into that. I think several of the entrepreneurs today, the big ones like Elon Musk and Jeff Bezos, were inspired as kids to see NASA and all the accomplishments, right? So you had people who, their fire for space was seated at a very early age. They went off and did other things, made their billions, and then they came back and said, “You know what? It’s 2000 and whatever, and, you know, we saw the last man set foot on the moon in 1972. It’s really time that we do something to get humans and America back into space in a meaningful way.” So, that’s the first thing, is just that passion, and that calling, and that inspiration.

The other thing, if you start looking at some of the technologies, we’ve started to see, in the last 20 years, the advent of this standard called CubeSats, right? Where you started with universities, Cal Poly and Stanford started looking at ways to modularize satellite components, put them together, and launch them cheaply into space. So, we’re starting to see these companies, and if you look at some of the companies like Bryce Space, who track investments for space, they’ve really started to look at these technologies being an enabler for people to make money, right? And so, you’ve got the passion by these entrepreneurs and you’ve got the technology that’s bringing down the barriers to some of the things that were only, in the past, possible by an entire country getting behind and putting their mind towards it.

Christina: Let’s build a little bit on that, because basically, what we’re seeing is the opening of a new industry, a space industry. Whereas in the past, it cost hundreds of millions of dollars to launch a rocket into space, what are we seeing here? Are we seeing that there is some sort of reduction in the cost of launching? You know, besides having the ability to put these satellites together cheaply, how are we getting this stuff up there now?

Dennis: Well, you’ve got several factors. I think one of them is people, now, the billionaires that are investing are really dedicated to this and they don’t stop when they have a failure. So they’ve been putting in their money and they’ve had these really smart people coming up this technology for a really long time. I think one of the things you’ll see at a company like SpaceX, and actually, Blue Origin, the Jeff Bezos’s company, is this idea of reusability.

If you remember, a couple of years ago, they had a launch where they launched Starman, that Tesla, into space, and then, at the very end of that dramatic launch, SpaceX landed two rockets basically in coordination right on the platform in the middle of an X, right? And the reason they did that, besides they wanted to show the the world how it could be done, is I believe Elon really understood that in order to bring the price point down, you have to reuse everything that you can. And so, they’ve, more than any other company that I’ve looked at, really taken a hard look at every single component and said, “Yeah, I know that in the past, people paid this for that component. Why is that price, though?” And their innovation is around bringing the cost down, so if they could manufacture it in-house and do things cheaper, then they do it.

Now, all of that combined brings the price point down from hundreds of millions of dollars, which is what it typically cost before SpaceX entered into the fray, and they’re around the price point of $60 to $80 million, maybe even less with the reusability, right? Depending on how many times you reuse the rocket. And then you’ve got folks like Rocket Labs with the Electron rocket. They’re at a price point of $5 million. That’s because they’re launching smaller payloads into space. Again, but the market’s there. People want smaller payloads to be able to do a mission that they need and then dispose of it, right? And that’s why it’s so much cheaper now.

Christina: So, we have SpaceX creating economies of scale and being able to really open up this competitive landscape along with these other companies. So, what impact is that having on the people that were in that space? Who was in there and what is their response like now?

Dennis: The ecosystem is large, I know we’ll talk about that, but in terms of the impact for a launch being that cheap is, all of a sudden, you’ve got other countries, you’ve got investors that are looking to buy into Big Data. All of these entities now see the access to space is cheaper, and therefore, it doesn’t eat as much into their profit margin to do those things, right? And another aspect of that is the services that people can provide.

So, if you’re a company that maybe doesn’t want to launch things into space, but you think the technology is right for you to blacken the skies with sensors, then all of a sudden now, that profit model actually makes sense, and then you can sell that service, whatever is, if you’re doing broadband internet or if you’re doing, “I wanna just cover everything with real-time video,” or whatever you wanna do, now all that makes sense for you to actually do because the cost of launch is cheaper.

Christina: So, the people that are, for example, hiring SpaceX to launch all these rockets up, it’s not just the U.S., it’s people overseas. So whereas before, they might say, like, “Well, I’m a French company. I’m gonna go with the French national airbus whatever,” you know, now they’re like, “Forget them. I’m going to SpaceX.” So they’re basically getting all the contracts, right?

Dennis: Yes.

Christina: And sucking up the business because of their competitive advantage.

Dennis: And I think when you talk about a $400 million launch, that is a lot of money, right? But what you pay for in that…United Launch Alliance, when they were doing that…they’re working to bring the price point down as well. I’m not actually sure where it is right now, maybe $200 to $300 million. That’s still a lot of money, but I don’t think they’ve had a failure, whereas, you know, you take the gamble – it is a gamble, but SpaceX is reliable – but you’re paying an order of magnitude less. And then you start to think, “I can amass enough investors that they can see a return on their investment more immediately. They don’t have to wait 10 years because they had to invest, you know, a billion dollars for me to get a couple of launches in.”

Christina: So the time is being reduced to get it into space, so you’re accepting a little more risk, but at the end of the day, if it didn’t get up then you’re not waiting 10, 15 more years for them to build their next rocket.

Dennis: That’s exactly right. Now, I think that SpaceX has even…I think they’ve turned around a launch, like the fastest turn time was, like, 48 hours. I mean, something absolutely just mind-boggling, right? When you think about what NASA did do with the space shuttle and we wait…it was like a billion and a half per launch or something like that. You wouldn’t launch every couple of weeks. Which is, incidentally, funny story, that’s how they sold the shuttle program, I think to Nixon, was, “We’ll be launching this thing…

Christina: …every week.”

Dennis: …basically, every week.” Right?

Christina: “We’re going on rides.”

Dennis: Because the cost model said that if you do that, then it’ll actually pay for itself, right? Now, we never got there, unfortunately, but…

Christina: It was a good model.

Dennis: …it was a good model.

Christina: It made sense.

Dennis: But that’s why you have a government to do those things and break down those barriers. I think the space shuttle program had utility because it taught us that space is hard, and in addition to what we did with the moon, it taught us that reusability in space is hard, and it’s something that these companies, SpaceX, and Blue Origin, and others, have not forgotten. They’ve learned those lessons and they’re asking the why questions now. Why do we have to keep doing it that way? And that’s what’s driving the innovation.

Christina: Yeah. So, that’s cool. They’re building on that knowledge. Let’s talk a little bit about what you mentioned earlier about people shooting millions of sensors into low orbit, basically, in space. So, explain to me a little bit, what are they putting there, and how many do they need, and what are we gonna expect from that kind of operation? Like, a $5 million dollar rocket shooting, like, 80 satellites into low orbit. Like, is that good?

Dennis: So, unfortunately, with the Electron, what their model is is, you know, like, 180 kilograms, like 400 pounds, will put your smallsat into orbit where you need it. What these other companies wanna do is they would have to launch like the Falcon 9 or another large vehicle to essentially spray out these things.

And so, what you wanna do in lower earth orbit, LEO, which is 200 kilometers up to, like, 1200 kilometers, is essentially, the best place that from a cost model perspective and the technologies that we have for optical sensors, you wanna be lower to the ground. That gives you a higher resolution, right? Now, in order to cover the earth, right, which is what these companies wanna do because, let’s think about the problems that you can solve if you darken the skies.

If you’re a country that worries about illegal fishing in your neck of the woods, then you need sensors that can show you where people are doing that illegal fishing, right? And you need to be essentially covered 24/7. If you’re a person that has a lot of land and you wanna understand where water is, right? Or you’re farmer and you wanna look at your crops and you wanna understand how it’s changing over time, the great thing about LEO is you’re closer to the ground, right? As opposed to 22,000 miles in GEO. The problem is is that, you know, Newtonian physics. We’re falling around the earth, right? So as you’re lower to the ground, the smaller altitude, you’re whipping around the earth, 170,500 miles per hour-ish, right?

Christina: Ish.

Dennis: So you can’t just have one satellite to cover the earth, right?

Christina: Right.

Dennis: You gotta have this massive coverage. Now, in the case of, like, SpaceX launched two starlink satellites not too long ago in anticipation of launching not 10, not 100, but almost 11,000 or so satellites. And what that will do, right, there’s gonna be one constellation, that’s gonna be, I think, at around 200 or 300 kilometers, and then another one that’s gonna be at, like, 1,100 kilometers up, still all LEO. Between the two, the one has got, like, 4,000 some odd and the other’s got 7,000. The reason why you do that is that coverage ensures that everyone on the globe is able to get that signal, right? If you have what’s called crosslinks, where satellites can talk to other satellites, you can do things like beam information to one from the ground and then get that all through the constellation. So constellation management becomes a more manageable situation, but really, the reason why you want all those satellites in space is you want there to be no holes in your coverage at all.

Christina: So, what are the kind of the policies that go along with doing this? Because it seems like right now, it really has hit a accessible price point in some ways for people to just sort of start launching stuff up there and seeing what kind of data they can collect. And so, you know, there’s a similar race going on on the ground, like, “Let’s just see how much data we can collect in this business model, and that’s really where our value is,” so is that similar to what we’re gonna see in this launching extravaganza? [inaudible 00:12:51]

Dennis: Well, yeah. That is an interesting time because, you know, there’s a process. You can’t just launch something, right? There are laws, there’s frameworks. In this country, the FCC, the Federal Communications Commission, is the regulatory body that says, “You can broadcast on this part of the spectrum to either get your data or uplink your data,” and if you don’t go through that process, then as a country, that’s when we say, “No, you can’t launch that satellite.”

So, what happens is, a company that wants to launch a satellite has to go to the FCC and say, “Here’s my satellite. Here’s my mission. I wanna go into this orbit and do this.” And the FCC gets together and they say, “All right. One, are you gonna create more debris?” Because one of the things about LEO, lower earth orbit, is, you know, we’ve been launching since the late ’50s, ’60s, right? And just proliferating a lot of debris up there. We can talk about that, too. That’s a whole ‘nother thing. But what they wanna make sure is that you’re not just leaving trash up there, because it’s a common domain, right? It’s one of the global commons.

Now, what happens is, if you don’t prove to them that you can track your satellite and that you’re not gonna be stepping on someone else’s part of the spectrum, they can actually say no. Now, we’ve had, in the probably last year or so, there was a company called Swarm Technologies that actually launched despite getting a no from the FCC. And so, we’re kind of in this uncharted territory where…

Christina: Didn’t shoot it down? Seriously. Like, come on.

Dennis: Well, it’s ironic because part of the problem they said was Swarm Technologies wanted to launch these things that look like hockey pucks. And they said, “We’re gonna launch these,” and the mission was the Internet of Things. They were gonna basically try to connect things for the internet and they wanted to be that global network that’s up in space. And the FCC came back and said, “We don’t think you can track…

Together: …your hockey pucks.”

Dennis: So, this company actually went ahead and launched four on an Indian rocket up into space, and then it got back to the FCC. “Hey, didn’t you tell them no?” And they’re like, “Yeah, we did.” So, we don’t even know what’s gonna happen right now. We don’t know if this is gonna be the first company that’s ever been…their hands slapped because they launched these things. No one knows the answer to that.

But to get back to what you were saying, the government understands that they need to make it as easy as possible for companies to operate in space and create these jobs and create these new technologies. And so, I don’t wanna say the Bush administration didn’t do that, but when I was working for NASA, I got a firsthand chance to see the Obama administration and their push to actually foster these policies that would allow companies to do it. So, we call it space traffic management, and the Trump administration has followed suit, and they’ve created a bunch of new policies meant at streamlining the process of trying to make it easier for people to launch things, people to operate things, and we just wanna make sure we’re mindful that we’re not putting trash up there and polluting it.

Christina: Yeah. So, some of these satellites are meant to just operate for a couple years and then they’re gonna be replaced, because the technology in them is advancing, so you don’t wanna put something up there and think that it’s gonna be good 10 years from now, right?

Dennis: You’re kinda talking about the one web model…the one where you have these mega-constellations. The great thing about them is you don’t worry about your 1 satellite dying, right, when you’ve got 7,000 or 11,000, right?

Christina: All talking to each other.

Dennis: All talking to each other, you actually prefer that some of these just burn up and you infuse the constellation with new technologies, right?

Christina: Mm-hmm.

Dennis: So it’s a continuous lifecycle of putting it up, the service is there, and then you’re upgrading it. And I think that’s the model that OneWeb want to do. SpaceX wants to do is, “I don’t worry that this one is gonna burn up and, oh my gosh, I’m not gonna have 1 out of 11,000 working,” you know?

Christina: Right. That’s so cool. I mean, it really is. It’s, like, just a whole new way to think about it, right?

Dennis: And it’ll bring down the cost of building satellites, right? The economies of scale. The technologies and manufacturing, all of those things are starting to come because people have dared to dream about putting 11…

Now, there are people in the government that are gonna go apoplectic about that many satellites in space, right? You look up and you can’t even see the sun because of these satellites. It’s still a big space theory, but what that is doing… Why I’m excited about that is because it’s creating a whole new ecosystem, right? And so if you have that many satellites in space that are doing things, and say you have the ones that are higher, they won’t be coming down for hundreds of years. Say you wanted to service them. That’s a whole new industry of satellite servicing. People that go up and they’re the tow truck, or the gas station, or the whatever.

Christina: The whatever.

Dennis: They change the tire.

Christina: Upgrade the deck.

Dennis: Right? That’s exactly right. And NASA is working on that, DARPA is working on that. There are entities in the government that see the value in that, and I think the great thing is investors do as well. They’re investing in companies.

Christina: That’s a good way to move into this idea of space infrastructure, which is another whole thing. So, we’re talking about constellations and we’re talking about building a whole new ecosystem in space, and there’s a huge amount for infrastructure that goes along with doing that. So, what are some of the things that are happening there that are cool? Because building infrastructure sometimes everybody’s like, “Whatever, you know, I mean, like…”

Dennis: Before, I talked about specific companies. I think one of the things I admire most about what I’ve heard and read about Elon Musk and Jeff Bezos is they fully understand that in order for the new space renaissance, whatever you wanna call it, to really firmly take hold, you have to build the infrastructure. You have to have people that are willing to do the foundational technology work that will enable people to manufacture things in space and build transportation vehicles that will routinely go to space, right? Not once every month, but once every day, right? And they realize that. Elon Musk’s goal – most people should know this, but if you don’t – his goal is to colonize Mars, right? And he realizes that in order to do that, you need a whole infrastructure. It can’t just be one rocket that goes and comes back.

Christina: You better have something on the moon and…yeah.

Dennis: You have to have a communication infrastructure. The government’s been thinking about this stuff too, but what excites me about the on-orbit assembly manufacturing is there are companies that realize, “Hey, this is our part that we can do.” So, we’ve got…Planetary Resources is a company that is actually…their business model is they want to go mine asteroids…

Christina: [inaudible 00:19:24].

Dennis: …near earth objects that have rare metals and all kinds of things, right? I think it’s Neil DeGrasse Tyson said once famously that the first trillionaire that the world will ever know is gonna be someone that…

Christina: This asteroid miner. That’s cool.

Dennis: The asteroid miner, right? Because they’ll bring back all these rare earth elements, these platinum and whatever else, back to earth. But if you think about it, if you were able to set up an infrastructure where you can mine resources outside of earth and then you’ve got in-space assembly, what in-space assembly does is it really frees you from the bonds and the barriers that we have of just launching in a payload fairing, right?

Christina: Yeah.

Dennis: So, a rocket is only so wide, so you’re constrained by the circumference, right, and the diameter of the rocket fairing. If you imagine some of the things that we wanna do in the future, having these huge telescopes and things like that, you have to start thinking about, how do you just bring up all the materials and then assemble it on orbit. So, there’s this company called Made in Space who’s trying to do that. I think they’ve got a technology called Archinaut, and what they wanna do is they actually want to just 3D print things in space, and you can then do whatever you need to do. You can optimize for your customer. And so, that’s part of the infrastructure.

Part of the other infrastructure is communications, right? We already talked about broadband, but think up instead of down, right? So, people that create an internet network in space so that things can communicate between each other. You need that. You need power, right? So, you’ve got people working on power generation and technologies in that space, and I think all of those things have to come together in order for it to be useful, right? We talked about Amazon before, about…companies like Amazon were made possible, and I read this in a book…”Space Barons” is a very good book. Companies like Amazon, only possible because the infrastructure was there, right?

Christina: Right.

Dennis: The post office was already there. The interest was already there. Credit cards were already there. Think of the same thing for space. You need to have all those pieces together, and then once that happens, then the real innovation will start, right? So, we’re in the beginning of the renaissance, but hang tight for when people start doing that.

Christina: So, we might have a trillionaire asteroid miner and then he’ll throw money into actually building the next step that we need to get a little further out.

Dennis: That’s right. I’m hoping it’s my daughter so she can retire me.

Christina: Me too. Me too.

Dennis: One of my kids.

Christina: I know. Yeah, I know, really. “Let’s go to space!” No, so cool. Okay. So, when we think about that, building the infrastructure, that’s a huge, huge investment by a lot of people; governments, private parties, and…just again, who owns the asteroid?

Dennis: The Obama administration, the policy that came out during that time…what the policy actually says is, if you can get to the wherever, that body, right, you own whatever it is you mine off of there, right? They were very specific about that. Now, it’s a far-reaching policy, right? Because no one’s out there right now digging up platinum off of a rock. But the implication is that, you know, once these companies actually… Normally, policy lags the technology, right?

Christina: Right.

Dennis: Someone does something and they’re like, “Guess we better figure out a policy to make sure we don’t kill people.” Right? That almost happened with some of the space stuff that’s going on, right? People were like, “Oh. Well, now we’ve got private ventures trying to launch things into space. We probably should figure that out.” But with this one, it was interesting because it actually led the technology getting us there.

And so, this is for the United States ventures, no one can say, “I own that out there because I discovered that rock,” right? It’s, “If you get there, you mine it, you own it.” And I think that’s a great policy. I think it’s something that I don’t think the Trump administration is thinking about rescinding or anything like that. It’s definitely gonna foster people…because they have that mindset, right?

Christina: Yeah.

Dennis: “I’m gonna go out there and get that.”

Christina: Let it go.

Dennis: You know, those are the types of policies that we’d love to see more of is, how do you make sure that people can see that they’d make money and investors will come in?

Christina: So, let’s talk a little bit about background. So, you’re a orbital mechanical engineer? Did I say that right?

Dennis: Astrodynamics.

Christina: Astrodynamics.

Dennis: Orbital mechanics works too.

Christina: Whatever. I mean, it’s very complicated. And then you have a MBA, so what would you say to young people who are really interested in space? Maybe they want to go the engineering route, but generally, what are some of the areas you’d say, “Oh, check this out”? Maybe it’s engineering but maybe it’s not, and, you know, give them some advice for their college.

Dennis: I always like to tell people now that you should know more than one computer language. Like, for me, it seems like where we’re going…and we didn’t even talk about AI or anything like that, but AI will end up being a huge enabler of space exploration. If you think about what we need to do in order to make machines land autonomously or autonomously observe something where we can’t actually directly control it, right? Because there’s the tyranny of the speed of light, right? So, if you’re out past Jupiter, it’s gonna take a lot of minutes for you to joystick that satellite to turn it around and say, “Oh, I think I saw something there,” right?

I think learning how to code is fundamental because those types of skills will translate to almost every aspect of space exploration, from guidance navigation control, to communications, to materials, right? All of these things, orbital mechanics, coding I think is number one for me.

Other things, you know, I always like to tell people, “Don’t forsake the arts for engineering to the exclusion of.” The true innovators, the people, like Steve Jobs and others, really had an appreciation for art and were able to infuse that, right? So, if you’re using both sides of your brain, I think a lot of innovation can come from that. And we need that, all right? As you’re starting to talk about these big architectures and structures in space…

Christina: Design is so important.

Dennis: …you need architects, right?

Christina: Yeah.

Dennis: You need designers. So you need to make sure that you’re doing both types of things.

Christina: Yeah. We’re gonna have to have another discussion about AI in space. I love these crossovers, it’s like, we’re just covering some of the…yeah, so.

Dennis: The other thing is chemistry. You know, we wanna terraform Mars, right? So chemistry and biology end up being very important. You know, I like to tell my own kids, “Just be excellent at whatever you put your mind to, and if you’re not afraid to fail, and if you’re really a person that can keep your eye on something and go for it, I think you’ll end up being successful in almost any industry.”

I’ve learned that from our MBA, and watching our cohort, and listening to professors and the people that have actually made it, right? Because we always do case studies on the billionaires, right, and the people that have made it. And it’s like, what was the one thing that was common to all of them? They never lost that passion, that flame, right? There’s so many stories how the incumbents wanted to keep people like Elon Musk out, right?

And so, you talk about the five forces and all that and what are the things that people need to do to be a new entrant. I think one of the things is he never let people saying no be the final answer, and I think that’s with kids as well. You get a bad grade on a rocket propulsion test? That doesn’t mean that you’re gonna not be a good engineer. You gotta pick yourself up – because that was me – and keep going, right? And so, that’s really the thing, is to keep that passion and to keep that focus on what you know you wanna do, and you’ll do it.

Christina: Yeah. Well, Dennis. I definitely will say that you are a person who has always shown unbelievable excellence in everything you’ve done.

Dennis: Thank you.

Christina: I’ve seen that from the day that we met and our experience in the cohort, and I see you continuing to do it now. So, we’ll have to come back and have some more of those conversations.

Dennis: Absolutely, I’d love to come back. Thank you.

Christina: The government is no longer the only customer for space exploration. The private sector is quickly expanding as billions of dollars of venture capital are making commercial space a reality. This is just the first step in the space industry revolution. Thanks to Dennis Woodfork for talking with me today. Until next time, this is Christina Elson in The Inc Tank.

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