Mistaking Innovation and Technology as Business and Progress

NASDAQ released a space industry-focused article the other day which seems to have inadvertently exemplified a mistake that many commercial space industry cheerleaders and experts make when chatting about the industry. The mistake--assume the newest types of technologies and innovations are the sole reasons for an industry’s sudden progress or a business’s success. Stories surrounding companies like Relativity Space exemplify this type of thinking (while 3D printing a rocket is interesting, it is just one small part rocket manufacturing and launch). It is a very common type of assumption made about the commercial space startups that is promoted and accepted with little thought.

It is a flawed assumption.

Within the NASDAQ post, the tone is immediately set with the use of all sorts of commercial space industry (and the larger technology sector) buzzwords: digital revolution, disruption, etc. Alarm bells go off based on the first sentence alone. When someone uses strings of buzzwords, that signals attempts to cloak an author in authority. Excessive buzzword use may signal an author doesn’t understand the content (and hopes readers won’t understand it, either).

Unquestionably, this is a cynical way of thinking about how people communicate.

The article goes on to describe how different technologies, based on digitalization, are the things spurring a “new era of advancement” in the space industry.

Well...actually…

Let’s use SpaceX to expose the flaws in this assumption.

The fact is, SpaceX is widely viewed, with good reason, as a very influential and successful launch and rocket manufacturing company. No matter what a person might think of SpaceX’s financials, no matter what a person might guess about the company’s motivations, SpaceX is a company to beat. Even China has stated that SpaceX is the company to beat. In reference to SpaceX’s successful Falcon Heavy launch, Chinese government officials noted:

“Our country finds itself in a surprising position where it must desperately catch up with a private company” (Laskai 2019). Evaluation of China’s Commercial Space Sector, page 25

New Technology ≠ Advancement/Business, Part 1

It may surprise a few readers that SpaceX doesn’t create “new” technology. Much like Apple (yes, the computer/consumer hardware company), SpaceX leverages existing technologies and ideas, and then tweaks, builds, iterates, etc., the heck out of them. There’s no magic or new technologies in the rocket engines it builds for its Falcon rockets. The propellant is mundane. But it’s the way the company designed and uses those things that makes it all something different and ground-breaking (oh, and reusable).

If anything, SpaceX’s employees are probably more responsible for the Falcon 9’s success and subsequent iterations than any of the technologies used by the rocket. Also, they designed the Falcon 9 rocket to be inexpensive to manufacture and to operate. The actual spur for SpaceX’s progress is inarguably Elon Musk. I always refer to this 2012 Air & Space article to show people what I mean.

More recently, SpaceX is doing the same thing with its Starship manufacturing. It’s not using exotic/expensive materials to build its upper stage, choosing to use stainless steel instead. It appears as if SpaceX is adapting inexpensive manufacturing machines to create the Starship’s body. Its newest engine, Raptor, is based on older engine designs.

None of this has to do with digitalization, other than the philosophy of quick iteration driving SpaceX’s efforts.

One could argue that Planet does the same thing with its satellites--it uses existing tech to bring a product, imagery, to a less expensive level than what is being asked by the likes of Maxar/DigitalGlobe. Cubesats aren’t exotic and the electronics on board, while small, aren’t necessarily ground-breaking technology. It uses technology closely related to consumer-grade hardware. This is what allows the company to shrug if a few of its satellites are lost to launch accidents instead of folding.

New Technology ≠ Advancement/Business, Part Deux

If you’ve ever seen a tour of the United Launch Alliance’s (ULA) factory located in Decatur, Alabama, you’ll have seen a lot of high-tech, expensive machines, and materials. Here’s a lengthy but really good tour of the factory on Youtube. You’ll see a specific type of thin aluminum the company orders for its rockets bodies. The aluminum has to machined a certain way by very large CNC machines for it to retain strength while losing mass. There are friction-welding machines. There’s a lot of technology there--it’s an amazing showcase for ULA. But, and I’m not picking on the company, no one believes ULA is at the forefront of the space industry’s “new era of advancement.”

These, admittedly hand-picked, examples demonstrate the mistake of thinking a technology or innovation is the key to a successful business--or even a successful economy. SpaceX’s success isn’t in its technology, but how it’s using it at a lower cost, which, in turn, makes its service less expensive for the company’s customers.

None of the trends mentioned later on in the article appear to be key to why Planet or SpaceX is successful in the space industry. From that article:

Among current trends driving further innovation: integration of computer vision, voice recognition technology, advanced augmented reality and other digital technologies to transform human-machine interactions; the development of “mega constellations” of low Earth orbit satellites that will provide advanced global connectivity; and AI and blockchain to provide security and management solutions for the avalanche of data the space business produces.

Based on how SpaceX and Planet are building and implementing their technologies and services, do the trends for driving innovation listed above make any sense? And why list legacy companies and their technical prowess and equipment (which they've presumably had for a while), when they seem to be so obviously not chasing, or not succeeding in entering, the commercial launch/satellite/transportation markets now?

Clearly, there are technology products, particularly computer hardware, software, and networking technologies for global satellite commanding, telemetry, and global communications that are changing all sectors of the space industry. Some of it is getting less expensive because of those technologies. Presumably, even the legacy companies such as Boeing and Lockheed Martin have access not just to those technologies, but other resources as well.

However, it seems what’s more related to the changes in the space industry, especially considering the rise of commercial startups, has everything to do with the Silicon Valley mindset. Especially considering legacy U.S. space industry had access to many of the same, if not better, space technologies and innovations long before companies such as SpaceX were even conceived. Companies like SpaceX certainly use technology, but perhaps it's their business philosophy of quickly weighing rapid changes against risk and accepting possible impacts on the bottom line that's key to rapid advancement in the space industry.