In this episode of Allies in Innovation, host Mikkel Svold talks with Kartik Kumar, CEO of satsearch, and Manfred Otto, Senior Director at Terma, about what’s really driving – and blocking – cooperation in the space industry.
They cover the challenges of working across borders, how commercialization is reshaping partnerships, and the impact of AI and cybersecurity on collaboration.
For those navigating this high-stakes landscape, this is a conversation worth hearing.
In this episode, you'll learn about:
- Why collaboration isn't always seamless in the space industry.
- Commercial off-the-shelf in space: reality or aspiration?
- Navigating complexities like export control and IP in partnerships.
- Impact of commercialization: driving standardization or commoditizing?
- Is space heading for a Wild West gold rush?
Episode Content
00:12 Introduction: Collaboration Challenges in the Space Industry
01:23 Observations on Industry Collaboration and Competition
02:41 Navigating Cross-Border Partnerships and Exhausting Legal Complexities
03:45 The Complexity of Satellite Production and Operations
06:15 Balancing Innovation with Regulatory Constraints
09:47 The Role of Smaller Companies in a Complex Ecosystem
13:08 Export Control and Compliance in Space Projects
17:40 Predicting the Future Demand in the Space Market
24:13 Trends Driving Commercialization in the Space Sector
30:45 Need for Standardization and Modular Approaches in Space Products
39:15 Making Space Accessible: The Future of Talent Acquisition
Production
This podcast is brought to you by Terma.
This podcast is produced by Montanus.
Episode Transcript
Mikkel Svold (00:12):
It seems logical that space and space projects have strong collaborations behind them. It seems logical because the projects are so complex and they're so big often, but it's actually not always the case. And building partnerships in the space industry can actually sometimes be quite challenging because of geopolitics, because of commercial interests, IP-related stuff, legal stuff, defense-related stuff, even. All that just becomes roadblocks in the collaboration and partnerships in the space industry.
(00:43):
And that is what we've got to talk about today. Welcome to Allies in Innovation. My name is Mikkel Svold, and on a video link we have with us Kartik Kumar, who is the CEO of satsearch, which is an online marketplace for space products and services. And we also have Manfred Otto, who is the senior director in the space department at Terma, or one of the senior directors that is.
(01:04):
I don't know, Kartik, maybe you could start this one off. What do you observe? What are the biggest challenges that you observe in the space market when we talk collaboration and partnerships? You sit outside of the actual production market, so what do you observe?
Kartik Kumar (01:23):
Yeah, thanks for inviting me to this podcast. I think as a marketplace, we have the vantage point of watching a lot of companies collaborate and compete, and there's a couple of things that stand in the way I think of what people assume is de facto the case in the space industry.
(01:41):
A lot of people think of projects like the International Space Station and the amount of collaboration between different countries and assume that that is the status quo across the industry. But as you mentioned in your intro, the finer details sort of dictate how easy or difficult it is to collaborate.
(01:58):
Particularly when it comes to cross-border collaboration, we see that the way that people treat their technology, the marketing and business development strategies, restrictions that might be in place due to export control and other legal aspects all make it more complicated than you would assume, is the obvious fact that people collaborate.
(02:21):
And the other piece of this is that, your collaborator today could be your competitor tomorrow, which means that there is some level of medium- and long-term thinking required to determine who are the parties you're going to collaborate with, how are you going to go to market with them?
(02:41):
And what's interesting in the space market today is that it's sort of the moment in which, from the commercialization point of view, this is being figured out. So, it's the time to be in the arena. It's when everything is sort of being fleshed out, and that makes it an exciting time for the industry.
Mikkel Svold (02:58):
And Manfred, you are in the arena. How do you see this?
Manfred Otto (03:06):
Basically what Kartik said, I fully agree to that. Yeah. When you talk about obstacles in space, of course there's a lot of complexity along the value chain. Think about the production of a satellite, the design of a satellite, the operations of the satellite, et cetera, et cetera, et cetera. With all the technology challenges, legal challenges, commercial challenges, whatever you had. I think the most challenging obstacle is to orchestrate all this complexity. That's what I basically observe.
(03:45):
And Kartik, as you mentioned, we as a company, we are working with competitors on certain missions very closely on one side, and on the other side, we are really in a very, very big and hard competitions with them. That's the way it works currently.
Mikkel Svold (04:04):
And Kartik, you mentioned the cross-border collaboration makes it even harder. Is that only when we talk Europe-U.S.? Or Europe-China? Or outside of the Euro zone or outside of Europe? Or is it also when we are on ESA missions or when we are on commercial missions that... regular satellite missions that are based in Europe mainly?
Kartik Kumar (04:35):
I mean, it's really at the smallest and the largest level. So, yeah, if you take the ISS at the largest scale, it's many countries collaborating together and then making a commitment to fund this project. And that trickling down into industry, and a whole bunch of different actors participating. But if you're even bilaterally, right, if you have a certain organization in country A and another organization in country B, and they have found that it makes sense to do business, whether it is to collaborate, whether it is from one to buy from the other, just navigating even the minutia of licensing, of export control, of customs clearance, these are not trivial.
(05:18):
Often, also because in the space industry you're talking about technologies that are classified as dual-use. And what that means is, take something like a battery. A standard regular battery that is qualified for space use could be considered dual-use if it has specific applications within, for instance, the defense domain, that mean that if it was a consumer product, you would get it from A to B much easier than if you're doing it within the space sector.
(05:47):
So, you need that level of expertise and knowledge, which ultimately also leads to time and cost. And that makes these collaborations hard. And I would say of course there's aspects of this and pockets of it that have been streamlined for, but the reason why we're still talking about this as being worked on or solved is also because the spectrum of space projects has drastically increased over the last two decades.
(06:15):
Going from your classical ESA missions, flagship missions, to government projects, to now straight up commercial ventures that are being backed by private capital, how do you in that environment make sure that these kinds of transactions run seamlessly? There's really lots of challenges still to overcome.
Mikkel Svold (06:36):
And Manfred, when we look over the years, because Terma has been involved in space technology for a long time, and you have as well also before you were at Terma. How do you see the transition from... I was just about to say before the commercialization began of space to now, where, I don't know if we can say that it's already commercialized, or are we kind of midway?
Manfred Otto (07:06):
Yeah, I think we are close, very close to commercialization currently. But of course, when you look back over the last decades, what happened? Yeah, it was quite regulated space was very much regulated, driven by space agencies like ESA for example, driven by geo return policies.
(07:31):
But I think this way of collaboration is now dramatically changing, as there are more and more new companies entering the space markets. As new technologies are positioned into the space industry, think about their technologies, like cybersecurity technologies. Think about cloud technologies. Think about artificial intelligence. These are all topics that are now pushed into the space, because space has realized... The space industry, that they can benefit a lot of this.
(08:09):
Think about AI automation to operate a satellite, or to process the data, the massive amount of datas that are generated during a satellite mission, for example. And I think, the borders between, I wouldn't say they're... I don't like the terminology that you have two worlds of space.
(08:33):
I think it's now coming into, let's say, closed ecosystem, where private space, commercial space is benefiting also a lot of institutional space and vice versa. It remembers me a little bit on the old days in telecommunication. You remember the early 2000 years when all the telecommunication networks were migrated to IP-based networks, and all this internet stuff, all this mobile communication came on top of the network infrastructure.
(09:13):
This was a huge boost in the industry. New business models were created in those days, and it feels a little bit the same as it was 20 years ago in the mobile communication industry.
Mikkel Svold (09:28):
And you mentioned that you see a lot of smaller companies or newer companies at least coming into the space. But are they... can you as a small company manage and find your way through all of this complexity?
(09:47):
You mentioned the technology complexities, the legal stuff, the commercial stuff. It seems to me that there's so much complexity that it doesn't really allow for newcomers. But you say the opposite Manfred. I don't know, Kartik, what do you see?
Kartik Kumar (10:02):
I mean this is, I think traditionally been the problem for space as well, is that the barriers to entry to the market have been very high. And in some sense, the established players were incentivized to keep it that way, right?
Mikkel Svold (10:14):
Of course, yeah.
Kartik Kumar (10:15):
Because, as long as the market stays a closed system, there aren't new entrants. You don't really have much threat coming at you. There are a number of things that happened starting with on the technology side. So, the advent of these small satellites, nanosatellites made it just purely from a cost point of view, viable for more companies to think about putting assets in space.
(10:37):
And so then, you have a technology trend that has reduced the barrier to entry. Then you had people develop business models on top of this. And then, we saw as a result of that, the capital holders, the investors in the private market seeing opportunity to potentially earn ROI off of that, and funding a number of these companies. So, suddenly you've seen an increase in the amount of capital flowing into the market, private capital flowing into the market, which also reduces what was traditionally a big barrier in the market.
(11:13):
And then, finally, on the licensing side of things, it's sort of a double-edged sword, because you've seen certain alliances form backed by essentially geopolitical trends, which means that within certain regions of the world, between certain actors, it's become easier. It's potentially become harder to then deal with the other parts of the world.
(11:37):
But even just, for instance, looking at Europe and looking particularly at the ESA member states, there are certain provisions that allow you then to come into the market. And if you're, for instance, I'm based in the Netherlands, if you're a Dutch company and you set up here to sell your products or services into Germany or in France or elsewhere.
(11:58):
So, these things have all come together to mean that we are seeing steadily the barriers, access to the industry dropping, which is where this thrust for potential commercialization comes from as well.
Mikkel Svold (12:11):
How small is small? Is it possible to be like a five-man team to do something?
Kartik Kumar (12:16):
It can be a one-person team in your garage.
Mikkel Svold (12:18):
Okay.
Kartik Kumar (12:20):
Yeah. I mean you can think about for a budget of less than a hundred thousand euros getting a satellite in orbit.
Mikkel Svold (12:29):
Okay, yeah, okay.
Kartik Kumar (12:31):
It's not pocket change, but it's something that's more accessible than a hundred million.
Mikkel Svold (12:36):
It's something that a private person with a normal income would be able to save money, and then use the pension.
Kartik Kumar (12:45):
I mean, if you want to put a really-
Mikkel Svold (12:47):
Don't want to-
Kartik Kumar (12:48):
... dumb satellite in space, you could do it for as low as 5,000 bucks. It doesn't do very much then in space, and it probably-
Mikkel Svold (12:53):
But then you have a satellite.
Kartik Kumar (12:54):
But you have a satellite just with a beacon that's just flashing every so often.
Mikkel Svold (12:58):
And you get to name the satellite also, right? And then that satellite will then be on the sat maps. I want to do that.
Kartik Kumar (13:05):
Yeah, you're right.
Manfred Otto (13:08):
So, I'm based in Vienna and there's in Austria, there is a space cluster.
Mikkel Svold (13:12):
Yeah.
Manfred Otto (13:13):
And we are quite good collaborating with universities, for example, with the university technical university in Graz and in Vienna.
Mikkel Svold (13:23):
Yeah, so-
Manfred Otto (13:23):
And those guys, they are building satellites. They are building nanosatellites as part of their PhD program for example, or as part of their master program.
Mikkel Svold (13:33):
Yeah.
Manfred Otto (13:34):
So, it is really really, let's say, a broad range of potential company sizes, starting with, let's say, a team at the university up to several hundreds of engineers there working on complex power distribution systems, for example. It's a very broad range.
Mikkel Svold (13:53):
Yeah, yeah, okay. We still have some obstacles to talk about. We talk about technical or technology complexities in the partnerships, but also the commercial complexities and legal complexities. I'm interested in, especially the legal and the IP complexities. How do you navigate those? Manfred, I don't know if you have any experience in that.
Manfred Otto (14:15):
I think one critical topic is always the export control. It's not a problem when you are dealing with projects within the European Union. So, this is quote often, let's say, quite easy. It's normal stuff. But whenever you look across Europe, then it becomes critical. Because Kartik mentioned dual use. This is quite a huge effort then internally also to check all the compliance, check all the regulations, exporting your solutions, your products to out of Europe.
(14:54):
That's always quite a challenge. You can violate a lot of rules, so you really have to take care of that.
Mikkel Svold (15:00):
And if-
Manfred Otto (15:01):
So we are really running a dedicated, more than less, a dedicated team dealing with export control, compliance topics, which is really critical there.
Mikkel Svold (15:14):
And if you are a smaller, newer company coming into the space market, how do you actually do that? Is it even possible?
Kartik Kumar (15:25):
Well, most countries have a regulator, so a government body authority that is intended to be there to enable business to happen. So, they are usually the first stop. Companies go to these authorities and essentially get the rulebook and an explanation, or maybe even an interpretation of the rulebook in their specific case. The authority, I think, will only go so far. So, often, that then means it's coupled with companies having to hire people who have this expertise. For small companies, it might be on a consulting basis. Somebody who helps them with very specific filings with an understanding of how to classify their technology, etc.
(16:07):
And then the larger company gets... and the more critical this becomes, they bring somebody like this on staff. But it immediately demonstrates also why building something in space, and I wouldn't say space is that unique, because if you were to build a medical device or something else, you similarly are under a lot of regulatory scrutiny.
(16:27):
And what that implies is, you have higher capital requirements, because your capital requirements are not the fact that you have to set up a factory and you have to buy materials. You have to get this expertise as well. And this expertise generally doesn't come cheap. And it's actually sometimes even rare to find somebody who's super well versed in all the rules and knows exactly how to execute a project like this from the legal perspective.
(16:52):
So, this is what goes into your business plan. You have to say, "Hey, I also need a compliance officer that is adept to what my technology set needs." And you put that as part of your de-risking plan. So, yeah, you'll see that often small companies, whether they know it in the beginning or not, they will very quickly figure out that the only way they'll get their technology, their product, their service... And in this, particularly in hardware products, I would say software has some aspects of this and then services, it's even fuzzier.
(17:23):
But really with physical hardware, it's tangible. And you can think of, "Okay, to get this thing from my desk into space, what is the path I'm going to have to take?" And one of those is as a parallel path to technology development to capital raising is just simply legal, compliance and regulatory.
Manfred Otto (17:39):
I think this is really one very serious obstacle what you mentioned, Kartik. Just think about the space. In space, you need innovations. You need to go ahead with your technical innovations as a company. You need to go to the market with your new innovations. You also have to maintain in your company, in your R&T team and atmosphere, that stimulates technology development. And we all need new technology to come down with the costs to ensure safety, to be more efficient, more flexible, et cetera, et cetera.
(18:14):
We all know this, but sometimes I have the observation that, whenever something comes up, I have an idea. This could be a massive innovation in space. You talk with your colleagues on the floor, having a coffee and a lot of creative ideas come up. But it's a long way from the idea to a product, because you have to deal with all the leading constraints. Yeah, export stuff, a lot of paperwork has to be done. I observed it in my life here independently.
(18:49):
If this is space or any other industry, this is sometimes really burying an innovation.
Mikkel Svold (18:57):
And is it necessary then?
Kartik Kumar (19:02):
I think that's the question, right? Some people would say we're over-regulating and we need to in fact deregulate, which seems to be a trend in certain parts of the world. To deregulate, to enable business to thrive and have innovation. And on the other side people say, "Look, there's all these externalities, right? You could go and create this innovation and you create the side effect that creates a downside for society, and the business, the entrepreneur is not paying for that. So who pays for that then?"
(19:28):
And if society has to pay for that, then society should have a say in whether this is allowed, and under what terms. So, I think this is maybe one of the hardest conversations, in fact of the day right now. Should we be regulating? What should we be regulating? When should be regulating? Where? It's not a simple topic, I think.
Mikkel Svold (19:53):
I don't know. How do you meet the regulatory body, Manfred, in the innovations that you at Terma come up with? Is it something that's ongoing or is it at the beginning of a project or how is it?
Manfred Otto (20:10):
Let's say, it's an ongoing process. Yeah, it's part of our R&D process. It's part of our offer process. So, it's really in our DNA.
Mikkel Svold (20:23):
Okay.
Manfred Otto (20:24):
So we have our internal processes and, as I mentioned, all the support, central functions that are supporting us to do the right steps at the right time. That's basically very well set up. Otherwise, it would be nearly impossible, I would say, to handle this efficiently. Efficiently.
Mikkel Svold (20:45):
Yeah. You mentioned in the beginning that you have some of the... or you mentioned some of the commercial complexities. The fact that you'd have to sometimes closely collaborate with direct competitors, and in some parts, and then other parts you are actually in fact die-hard competitors.
(21:08):
How do you navigate that and what kind of complexities has that given? Do you have any examples of a situation?
Manfred Otto (21:16):
Yeah, of course, of course. Let's talk about, let's say, our European space missions, ESA missions, where you have geo-return basically. And finally, space. It's also kind of community. You know all the companies. You know all the partners, what you have, what they're doing, you know their products.
(21:41):
And basically if it comes to a mission where I say, "Okay, it would be great to do something out of Austria, but we could complement it with something from the Netherlands," for example. So in order to satisfy some geo-return policies so that we optimize our chances to provide an offer that fits to the customer needs, not only from a technical side, but also from a programmatic side.
(22:10):
I think every company we are working with is very open to that. So, sometimes we addressing those companies, sometimes we are addressed by these competitors. That's a very good relationship on one side. But on the other side, it can happen. That we are in a strong competition, and we have to fight for the project against each other. That's okay. As long as we do it fair, in a fair way.
Mikkel Svold (22:38):
Because that's one of the questions, is what if then you are a smaller player up against a larger competitor? Is it possible to have a fair game, so to say?
Manfred Otto (22:50):
Of course. I think you have to look. You have to play fair. Because on one side, as I mentioned, you are in the competition. And on the other side, you're in the collaboration. This is a prerequisite, being fair. There's no way not being fair. Yeah.
Mikkel Svold (23:08):
Yeah. I think we've talked about some of the complexities that are now. When we look ahead, what do you see of changes in the space environment, in the way to do business for space projects? Do you see it becoming harder or easier to build collaboration, build partnerships? Well, build for space? Kartik, what do you see?
Kartik Kumar (23:38):
Yeah, so I mean there's one aspect of the challenges that we didn't talk about so far, and I think it's with reason, because in some sense we've been delaying having to address that. And that is, what is happening at the end of the value chain? So for sustainable business, sustainable commercial business, what you really want to address is, who is the paying customer at the end of that value chain? What value are they getting? What price are they willing to pay?
(24:13):
Because in essence, the entire economics of the ecosystem that is attached to that is governed by that. And what we've seen over the last decade or so, and what we see even on soft searches, that there are a lot of companies that have presumptive markets, which means that they have been funded to go out and build in these nascent markets, where demand is not very well characterized yet. Take for instance, the lunar economy. We can presume 50 years from now, a hundred years from now, there might be a thriving lunar economy.
(24:45):
And yet, today we don't really have a sense of who is the paying customer. We have a few examples of organizations that are kickstarting that demand, whether it be a NASA or an ESA, or even a defense department. But there's nothing close to a thriving, sustainable commercial lunar ecosystem.
(25:07):
So, then you look at how many companies have been funded to build landers, to build launch vehicles that can deliver mass on the moon, who have institute resource technologies, communication networks on the moon. You have to ask the question, "When is all of that going to get sorted out? What demand will actually turn up? And who will survive that? And who will not as a result of realizing they built for the wrong customer or the customer they built for wasn't there? Or the customer they built for didn't have the money that they presume."
(25:42):
And I think that that's what the big reckoning is for the space industry in the next decade, maybe up to two decades, is that all this exuberance around commercial space, and where there is money to be made, quite frankly, will meet reality. And through that, we will see through normal market mechanisms basically, winners and losers. And so the big challenge and what we are seeing is, lots and lots of teams trying to understand, what does the future actually look like? And predicting the future is that the thing that everyone would love to do.
Mikkel Svold (26:17):
Notoriously hard.
Kartik Kumar (26:18):
And notoriously hard? Exactly. So how do you do that? Well, you can develop best practices around how you look at trend data, market data, analyze stuff. But that's a competence that we're seeing that a lot of companies now are recognizing is important for them to be able to make the right moves, moving forward. And their repeated ability then to attract capital, to attract talent, to move forward is fulfilled by that cycle being closed.
(26:42):
As in, if you can make a step in that direction and prove that some fraction of your business model is viable, well then, you get to put down your flag metaphorically and say, "Hey, we've reached this point. Attract more capital, attract more talent for the next step." But yeah, if I have to give an analogy, I sort of feel like we're in the Wild West at the moment. Everyone believes that there is gold to be found. The question is, who's going to find it and where are they going to find it?
(27:14):
And out of even the gold rush, there were winners and losers, right? There were people who mortgaged everything they had and lost everything they had, and the others who made a fortune that will last generations. And I think space is in that position right now.
Mikkel Svold (27:30):
And then, where is the gold?
Kartik Kumar (27:33):
Look, that's the thing. You heard it here first, if you could build a time machine, go into the future, find that out and come back today, you have a straight path to becoming a very successful entrepreneur. So, I think that that's the thing, right? And that's the excitement and the uncertainty and the difficulty of building in nascent markets.
(27:54):
In well-established markets, demand is quantified. And then, what you're basically trying to do is to build a better mousetrap to capture that demand. But, in a market like space, demand, it's not just supply, meaning technology developing. It's demand developing as well. The demand is in and of itself different from, for instance, 10 years ago in the market.
Mikkel Svold (28:15):
We've seen that before in many markets, including of course the most obvious one, the iPhone introduced, where basically introduced to no customers or with no customers needing it. And now who doesn't own a smartphone?
Kartik Kumar (28:28):
And you had a whole app ecosystem that is worth trillions of dollars, I think by now, that developed out of that. So, it served as a platform as well for further growth and further economic development. So, space I think is in that place, which is why it's so exciting. Because you step into the arena now, and the person next to you might claim they know the future to your right. And the person to the left might claim they know the future.
(28:54):
And the truth of the matter is none of you know the future. You're all there, because the future's unwritten, in that sense.
Manfred Otto (29:00):
I think that's a very, very good example what you mentioned with the iPhone. Yeah, I remember in the nineties of the last century, I was one of the first there buying a mobile phone, and I received a call. And all those guys around me, "I don't need this stuff. But this is useless, completely useless." And see how this technology has changed our daily life.
(29:22):
And as you said, it's very hard to predict where the journey goes in the future. So time machine for traveling 20 years into the future will be very, very good. But we all don't know it. And you're right, it's about creation of demand, fully understand, fully agree on that.
(29:40):
But yeah, I wouldn't say, as you mentioned there, is it becoming harder? Is it becoming easier? I don't like the word harder. Of course, it's becoming complex. Yeah. I think everyone needs to be creative, needs to act agile, because now, new players are entering the markets. A lot of ideas are popping up, not a lot of new business models are created.
(30:05):
And I think it's a very, very good and promising challenge, to play a role in that market for the future. And this is a huge motivation, yeah, for I think, for everyone who is working in space.
Mikkel Svold (30:23):
And this is of course also connected to the fact that we see the commercialization of space. What kind of partnerships, and what kind of developments do you see in the service offering to the new space industry or era?
Kartik Kumar (30:45):
So, do you mean what the trends are currently? Or what sort of the gaps are?
Mikkel Svold (30:50):
No, I mean, connected with the commercialization, what does that drive? Does that drive cheaper products? Does it drive more collaboration? Well, likewise, bundling of products or services, what do you foresee?
Kartik Kumar (31:08):
Well, I think there's a very good example in this light that is spoken about in space as though it exists today already. But I can tell you from the daily work that we're doing, it is partly in place, but largely aspirational.
(31:24):
And that is this concept of commercial off-the-shelf. So when you buy something on an e-commerce website as a consumer, you buy what exists in principle already, that you can have delivered on your doorstep tomorrow morning. In that, you have transparency about what it looks like, how big it is, how heavy it is, how much it costs, et cetera. And you pick. You pick based on what's the offering on the market that fits your budget, fits your specifications.
(31:53):
In space. It's not really like that. We talk about commercial off-the-shelf in the same way as though it is a thing, as though if I need a reaction wheel, or a thruster, or a battery or whatever it is that I can go and pick it off the shelf and it's there. And yet the reality is that that is aspirational.
(32:11):
Companies are looking at standardizing around that. But standardization is a topic in many industries that has posed difficulty, because you don't want to standardize around the wrong standard. You don't want to be on the wrong side of history. You want to be on the right side of history, which turns out to be this prevailing standard that the leads industry forward and allows things like scalability cost to be amortized and reduced ultimately, and also risk to be spread.
(32:39):
But where what is going to get standardized... And standardization comes with it in the short term a threat. Because when you standardize, especially if it's open standards, you end up with effectively commoditizing part of the market, which means your margins on a per-unit basis of whatever you're selling typically also decrease. So, there is a natural incentive to say, "No, no, I have this unique thing. It is not going to be commoditized because it affects your balance sheet. "
(33:06):
But in the long run, if you want to scale and sell a hundred X, a thousand X, 10,000 X of those units, it's unavoidable, because there are certain natural requirements if you want to scale. So, I think this whole commercialization trend is very difficult, because that part of it is highly unpredictable. What standards are actually going to prevail?
(33:29):
We had an example of this with the CubeSat standard coming out of the academic environment and then getting adopted by commercial enterprise, and even governments. But that now needs to be reinvented because we're going to a different form factor of satellite, different types of payloads, different requirements.
(33:45):
And we've dealt with quite a few companies that are very happy to standardize inside their own organization, because then they can build process efficiencies, cost efficiencies, time efficiencies.
Mikkel Svold (33:57):
Also, that matches their specific workflow also.
Kartik Kumar (34:00):
But they want to build a walled garden. They don't want their neighbor having exactly the same proprietary technology and IP or access to the ability to do that. So, how do you get these organizations to sit at a table and come together around a common set of standards?
(34:17):
Well, the space agencies have done things like this. ESA has a set of standards. NASA has a set of standards. But they are all architected around the needs of the traditional flagship missions, large institutional missions. And they're trying, I know, towards, on the small satellite side and the commercial side, to go with the market. It's just the market's going at a speed that is 10 X, a hundred X faster than anybody can keep up with.
Mikkel Svold (34:42):
But Manfred, how do you then create the USBC version for space? How do you create something that is universal? This is how we do it.
Manfred Otto (34:53):
That's a very good question. Just coming back to Kartik, I think, at least for mid-term, if you look into, let's say not long-term, mid-term, mid-term perspective, I think space urgently has to look into standardization, into a platform-based approach. I think there's something is going on already. Also, going into software-defined solutions like the software-defined satellite, standardized platform, standardized payload.
(35:28):
So, it's a very kind of modular approach where you can compile your spacecraft and design your mission based on existing commodity products. And I'm still sure that there's still something there for solutioning, for customizations, for adaptations. Coming back to us, of course, when we are building up a product, normally you have a bunch of regulations, basically ESA standards, which you have to fulfill, because we are doing a lot of ESA projects, for example.
(36:05):
And then, of course when there are some changes in interfaces, then we are evolving our products continuously, and bringing that as a product feature on board. That's basically how to handle this. So, we start with a kind of minimum layer of set, what is necessary for our customers, based, for example, on ESA standards, as you mentioned. And then, of course, adapting our products accordingly, step-wise approach.
Kartik Kumar (36:38):
But then-
Mikkel Svold (36:38):
I think-
Kartik Kumar (36:38):
... there's always a... I'm sorry, just to interject, there's always a risk calculation, right? Because which of those trends do you believe in substantiates investing in now that you will, it'll sustain? And which one of them will die out? That's always a looking glass problem. You have to kind of have enough expertise and intuition to say, "Okay, this is the one that makes sense for us to build into our product."
Manfred Otto (37:05):
Exactly, exactly. It's a decision, it's a product management decision, yeah.
Mikkel Svold (37:07):
I think actually this actually talks into maybe the issues related to being a small company versus being an established bigger company in this market. Because, if you're one of the established ones, you come from this notion of every single product for space is unique, it has a lot of financial funding because it's a government, it's an ESA project, whatever, something like that. And then you kind of have to turn the ship. You have to turn the cruiser into something that is more fast-paced. Whereas if you are a small, newer company, you may be born like that.
(37:44):
So, that also sets requirements for, well, a company like Terma, and of course all of the other companies or established companies in the space sector.
Kartik Kumar (37:54):
And, I mean, the financial industry has a way for these worlds to meet. So, traditional merger and acquisitions is a way that these small companies that bring these cost innovations into the market can become well-capitalized by a larger company that says, "Hey, this is in our strategic interest long term."
(38:13):
And I think that's in the stars for the space industry, that we'll see many more of the larger companies teaming with the small companies. And you could get partnership and collaboration not just from the perspective of an MOU, or an actual external collaboration between parties, but just through acquisition. Small company could get bought up by the big company and pulled into their long-term strategic initiatives.
Mikkel Svold (38:39):
And then also secure their funding that way.
Kartik Kumar (38:42):
And it's healthy for the ecosystem. You have shareholders who get an exit potentially that way. And that technology has a chance then to be refined and to scale, because you've got capital backing it. That means that instead of just being able to build three, two or three prototypes and send them into space, now you have an engine behind you that can build a hundred of these every month.
Mikkel Svold (39:05):
Just a very last question before our time is up. What's the next step in space right now?
Kartik Kumar (39:15):
That's I think a difficult question simply because there's many steps in my mind.
Manfred Otto (39:21):
Very difficult.
Kartik Kumar (39:23):
I think the one key thing is, I think we are on a good path of reducing barriers to access to this market, and that should be continued, with real enthusiasm and energy. We need to continue to break down those barriers and bring more people into the sector, because I think it becomes a self-fulfilling prophecy of seeing more use cases, more being validated, more talent coming into the industry if we just reduce those barriers.
(39:51):
So, it feels to me like the bottom line to everything is that is make space super accessible for anybody, and make it a normal career for a person to consider, right? As much as you might think of a job in the finance industry, or in the classical tech industry, I think space should enter into that conversation as just a normal job, a normal industry to be a part of.
Mikkel Svold (40:16):
Yeah. So we should all encourage our children to want to be an astronaut. And then maybe not all of them can become astronauts, but they can all become engineers in space-
Kartik Kumar (40:28):
But that's what I mean. You no longer have to go after the jobs that are so rare.
Mikkel Svold (40:34):
No.
Kartik Kumar (40:34):
You could just become a mechanical or electronics engineer working for a company that is building a satellite, that is doing methane observations for climate change monitoring or whatever.
Mikkel Svold (40:46):
Yeah. Right, Manfred-
Kartik Kumar (40:46):
That becomes commercial-
Mikkel Svold (40:48):
Is it the same thing that you're seeing, Manfred?
Manfred Otto (40:51):
I think one of the most challenges is talent acquisition because you need all this broad ecosystem of knowledge, legal stuff, commercial stuff, and especially engineering competences. Technology for developing new technologies. You need engineers, you need creative engineers. You need to attract those engineers.
(41:15):
And as you say, as Kartik says, space is now becoming more and more, let's say, let's call it popular. And we have to work into that direction, because it's accessible more than less for everyone, space. And I think I'm very optimistic when I look into the future of space on our industry.
Mikkel Svold (41:42):
I think, let those be the last words, and then let's encourage our kids to look at the stars just once more before it all light pollutes away from us.
Manfred Otto (41:50):
That's what I always do.
Mikkel Svold (41:54):
Exactly. Manfred Otto and Kartik Kumar, thank you so much for joining us today. It was a real pleasure.
(42:01):
And to you guys there out there listening, if you have any questions, please do reach out on podcast@terma.com. That was podcast@terma.com. And yeah, of course, if you like this episode, share it with your friends and your colleagues or whoever you think might find this episode and this podcast interesting.
(42:21):
I think that's all that we will talk about today, and what's left to say is just thank you so much for listening.