In case you didn’t see it, SpaceX nailed the Starship test landing today: https://www.youtube.com/watch?v=ODY6JWzS8WU. Success–maybe. The rocket blew up a few minutes after landing (around the 8:26:00 mark): https://www.youtube.com/watch?v=_jWbqhP5eJI. SpaceX just needs to dump Starship’s “explosion feature,” and things will look a lot better. Baby steps…
A little over a week ago, I released my analysis of the saturated, over-hyped space sector areas. The primary idea behind the Slugworth article was to highlight the common tail-chasing in this industry. The spinning is the activity, but as with dogs, all it does is create amusement to onlookers and confusion without real progress. The pitches all encompass similar messaging: “It’s like this imagery, but better.” Or, “It will beat SpaceX’s XX.” And, “This technology will revolutionize the XX part of the space sector.”
Such statements are the amusing chest-beatings of space sector companies with the programmatic and financial frailty of a pre-serum Steve Rogers. Two of the Slugworth article areas concerned smallsats and Earth observation (EO)/remote sensing (RS) satellites/services.
In the case of the former, building smallsats for commercial missions still requires customer time and expertise. There is no walking into a satellite dealership for a commercial company even contemplating using satellites for its purposes to buy a ready-made satellite for immediate launch into orbit. Of course, there are real-world considerations, not the least of which are launch costs and schedules.
But the growth of smallsat deployments and the continuous hyping of that growth makes it seem like the smallsat industry is providing that experience. In reality, the industry provides more of a “Heathkit”-style experience.
For the latter, companies like Planet, Spire, and others offer products–Earth imagery/radio data. They offer those products and their analytics services to all who are willing to negotiate with them about pricing, etc. And more companies are jumping in to offer similar products and services, hoping that better imagery resolution will make their products competitive. Some will count on government contracts for their products (but not services–because governments have boatloads of analysts). I’ve provided a few analyses about why EO/RS isn’t a market yet.
It’s a positive sign for the industry that it generates so much interest and increased investment. It could be argued the tail-chasing is just a part of companies attempting to find a niche business that will shake out into a real market. If that’s the case, there’s a lot of shaking that needs to happen, which will leave many investors frustrated. Tail-spinning and excitement can sometimes lead to unpleasantness.
Overused Categories, New(ish) Business
That’s one reason that ClimaCell’s announcement is interesting because it’s using EO/RS smallsats to grow an existing business. While the sector and platform match overdone space business categories, ClimaCell’s business model does not. Last week, the U.S.-based company announced it would be deploying a constellation of RS radar satellites to supplement the weather data it already collects. In other words, it will be a commercial constellation supplying weather data, stepping into a service area where governments dominate. Weather is significant, after all.
At first glance, the announcement is a snoozer. What ClimaCell is announcing is not in-line with the big promises from other startups. It’s not changing the world. It’s not transporting people to other planets. Even worse, ClimaCell’s main competitor is the U.S. government, which gives satellite-procured weather data away for free. Because it’s free and generally perceived as good enough, there are many companies based on the use of that data. Those companies include most weather shops for T.V. broadcasters, airports, and airlines, etc.
However, there are some things people should understand about ClimaCell before immediately dismissing it as another upstart EO/RS operator–it’s already a business.
It provides accurate weather forecasts to anyone interested in the company’s data. ClimaCell had advertised (before the satellite constellation announcement) that its forecasts are 60% more accurate than forecasts based on U.S.government-provided data. To get that accuracy, the company collects radio signal data from all sorts of devices–smartphones, wifi, street cameras, and, yes, satellites–resulting in millions of data points each day.
Some experts question how accurate ClimaCell’s predictions can be using these technologies-which, frankly, is a good indicator that the company is heading in the right direction. Another positive indicator of ClimaCell’s service quality is the customers who have signed up with the company: Amazon, Jetblue, Ford, United, and the New England Patriots are just a few. The company’s investors, such as Softbank, are confident enough to invest several million in ClimaCell’s business. At least one of its customers is an investor. These successes are for the service using existing data sources, not the new satellites ClimaCell wants to field.
Essentially, this company has established a weather prediction service which, in the five+ years since ClimaCell’s founding, has gained customers with recognizable brands. And many of those customers have a conservative way of conducting business, indicating that whatever risks moving to ClimaCell’s service represented, those companies saw the service as superior enough to switch.
Ivory tower experts may have some questions as to ClimaCell’s unorthodox use of many sources of radio waves. However, some of the company’s customers, such as the airlines, maintain weather data professionals who appear to have no issue with the data’s provenance. More intriguing might be that these companies pay for ClimaCell’s data instead of turning to the free, “good enough” data the government is offering (which they were familiar with). Also important, using data from its satellites means the company isn’t straying too far from its core competency.
The Other 5 Billion? (And the Satellites that Might Serve Them.)
ClimaCell has been pushing an estimate about how many people worldwide have no access to weather data from radar: 5 billion. It appears ClimaCell is pursuing a global market and that radar weather satellites would help. While the company hasn’t provided a definite number of satellites in its constellation, it’s used the word “dozens” as a pseudo-quantity.
Dozens of ClimaCell satellites will bring the revisit rate down from the Global Precipitation Measurement (GPM) Core Observatory satellite once every two-to-three days to once every few hours. They will also be smaller than GPM (which is about the size of a shuttle bus)–mini-fridge size. A small form factor like that will help to bring launch costs down for the company. ClimaCell has yet to reveal who is building its satellites (and who is launching them).
According to ClimaCell, it expects the satellite constellation to cost $150 million. If it manages to do that, it will be the least expensive dedicated weather radar constellation on orbit. The company compares the satellite’s radar payload to a payload on NASA’s GPM satellite.
That satellite was launched in early 2014, operating in a low Earth orbit of 407 km during the seven years since then (four years beyond its design life). The satellite’s payload sensors are two radar types and an imager. One of those sensors, like the one proposed for ClimaCell’s satellites, uses Ka-band. The other uses Ku-band. Different from ClimaCell is the GPM Core Observatory’s cost–$978 million.
That is correct–one billion dollars for a single satellite with a design life of three years. There are two other payloads than the Ka-band radar on GPM, but still, it’s no wonder the U.S. government seriously slowed plans to throw a constellation of GPM satellites in orbit. The single GPM satellite provides excellent data, but it is limited, primarily because the satellite observes specific locations maybe once every few days.
The low revisit rate means data from the satellite’s sensors, freely provided to companies relying on it, is old–about two days old–before the satellite’s sensors provide updated data. Since weather changes by the minute, that lack of data “freshness” is a problem. It’s also ClimaCell’s opportunity, which may result in benefitting the other five billion people.
There are other U.S. weather satellites on orbit (the latest is JPSS-1). But there aren’t many and there certainly aren’t any with the Ka-band radar payload. The initial costs for two JPSS-type satellites (and SUOMI-NPP—already deployed), were estimated to be at $3 billion (page 21). Which means each satellite costs about $1 billion. (I honestly don’t understand how these costs are justified…) Worse, the U.S. government is buying two more JPSS satellites, from a different manufacturer (Northrop Grumman (Orbital ATK)), theoretically for less. The overall constellation of four JPSS satellites won’t be deployed until 2031, effectively keeping weather updates from those satellites to perhaps one day intervals (the satellite lifetimes are seven years).
Other Opportunities (Challenges)
There are some challenges in ClimaCell’s plans.
In its core business so far, the company has been dealing with the software side of things (it acknowledges it is a Software as a Service company). While the company isn’t building the satellites (hardware), it will be operating them beyond its SaaS experience. Companies, such as Apple and Microsoft, have attempted to straddle this gap (Apple from hardware to software–Microsoft from software to hardware) initially with quite a few missteps along the way. ClimaCell will misstep as well. When a large company missteps, it can recover. But a smaller company might not.
Another challenge may stem from the $150 million budget. It’s not clear the budget is the result of research on ClimaCell’s part or a guess. If it was well-researched, then it won’t be an issue. But if the company just threw out a number and then tries to stick to that number at all costs–that’s a recipe for failure. I would guess the company has researched and selected a satellite manufacturer, which informs the constellation’s budget.
Research also likely extended to Ka-band frequency interference with other users, yet another possible problem. Since NASA somehow managed to figure out this challenge for GPM, ClimaCell may look at the agency’s mitigations as a road to satisfying government frequency mandates.
Overall, when compared with all the other space companies starting up in the smallsat and EO/RS industries, ClimaCell is in a realistic position to implement its plans (which is something we don’t see in a majority of the others). It has customers, concrete plans for its data (because it will be the data’s user), and investors to boot. As important, it’s filling a niche that the U.S. government has neglected.
So long as it all works, the question remains whether the $150 million is too small of a budget for a weather constellation.