Desch Talks Iridium Transformation After SEOTY Win

For the first time in its history, Via Satellite has its first two-time winner of its Satellite Executive of the Year (SEOTY) Award. Matt Desch, CEO of Iridium has overseen one of the most dramatic re-inventions that a satellite company has ever seen. Iridium’s transformation from failed operator in the late 1990s to success story over the last few years shows anything is possible in this industry. After he was announced winner at a lunch ceremony at the SATELLITE 2019 show in Washington, Via Satellite caught up with Desch about his Iridium story and what it means to be our first two-time winner of the Award.

VIA SATELLITE: Matt, once again congratulations on being a two-time winner of our Satellite Executive of the Year Award! What are your thoughts on this?

Desch: I was certainly surprised, honored, and humbled by the whole process. It was a very dramatic event, knowing you had changed the format this year, and brought user voting into it. It was totally unexpected, but really gratifying in the end.

VIA SATELLITE: What do you see as the major achievements of Iridium over the last couple of years? How does it feel to finally get Iridium NEXT up and running?

Desch: I am sure one of the reasons why myself and Iridium were recognized was the sheer size, scale, and scope of what Iridium has achieved over the years. Iridium has a long and very interesting history, and there was probably the culmination of massive amounts of skepticism over the years, whether a system like Iridium could achieve long-term maturity and success. I have mentioned in the past that I feel like we are the Academy Awards starlet that finally gets the award and is called an overnight success story by everyone, and she says “sure, a 30-year overnight success story!” We are approaching 30 years since conception. While everyone is recognizing our current success, completing Iridium NEXT and undergoing a financial transformation, it’s really been a process of building the company over the last 20 years to a high level of performance and cashflow.

VIA SATELLITE: Given the somewhat checkered history of Iridium, do you think this makes the achievements even more impressive?

Desch: I think people assume if a business fails once, it could never succeed. I encourage our organization to embrace our history, and to embrace the challenges of those early days. Anyone who does not remember their history is due to repeat it! We strive to be a humble organization because we know the challenges we went through, and how we overcame them. It makes us a very pragmatic organization. It makes us very focused on what Iridium needs to do in order to be successful and those are all good attributes to have as a company. We celebrate our history. We embrace it and we have learned from it to achieve the position we are in today.

VIA SATELLITE: You came from the telecoms world (just like me). Do you believe the satellite industry has fundamentally changed during your time? Did you see the industry as a little conservative/backwards when you joined?

Desch: I think you will agree with me that the satellite industry was quite a bit smaller than the terrestrial wireless world that I had immediately been a part of when I joined Iridium. When you take the whole of the telecoms world, the satellite industry was just a fraction of the size. It seemed a little slow moving when I arrived about 13 years ago, and pretty conservative in its thinking. There was not as much innovation underway as I had been used to seeing as I emerged from the 2G/3G timeframe of cellular. I came over to the satellite industry thinking it would be a similar scale and size, but initially found people more closed minded about adopting new ideas. Many people seemed to just move between companies in the industry. I was constantly reminded by some of my competitors of how great things had been in the past, and how what we did — creating a Low Earth Orbit (LEO) system — broke some unwritten rule. It was said that since we failed, we somehow demonstrated that innovation was dangerous. I didn’t judge these views; they were products of a situation that in many ways, Iridium helped create through our initial failure.

When I arrived in 2006, we were still in the “nuclear winter” that came out of the failures of “Space 1.0” in the mid-to-late 1990s. Launchers had consolidated. There really weren’t a lot of new “big ideas” at the time. Going to industry meetings back then, it felt like it was always the same people on the same panels talking about the same things. I knew Iridium’s path had to be different. I do believe things have changed quite a bit in the 13 years I have been in the industry. I have seen a resurgence of excitement and enthusiasm about new business models and a lot of new “big ideas.”

VIA SATELLITE: Now Iridium NEXT has launched, how difficult has it been to get this project — arguably one of the most ambitious in satellite history — over the line? Did you have any doubts that this would happen?

Desch: It was a challenging process. I have always had 100 percent confidence, but that didn’t mean there hasn’t been a lot of stress and nerve-wracking experiences along the way. You hope things will happen one way but they end up happening another way, which meant you had to find creative alternatives. People on the outside looking in at Iridium probably counted five consecutive miracles that occurred. I’ve never seen our progress as miracles; they were just good plans, executions, and contingencies. We just executed plans very well as a team. Still, there were a lot of challenges along the way. Getting export financing completed, having a launcher blow up when we were getting ready for our first launch, losing a complete launch provider because of the Russian/Ukrainian conflict, etc. Another one was the challenges we faced creating the hosted payload environment over the years. Through all those, we had a vision. We had contingency plans. We had and have an excellent team of people who were all on the same page and executed extremely well through these and other challenges, and developed confidence as a team. It helps that we were an existing company, with a strong business model, and a lot of great partners that allowed us to grow and prosper with new products and services. It fueled what we were doing with Iridium NEXT, and the two were very synergistic.

But, there are also times I am glad I have amnesia. I don’t remember bad things. I have never been able to smell bad smells, which was a gift I was probably given by an older brother who probably terrorized me at some point. I basically forget about some of the bad things that occurred along the way. Maybe it is a coping mechanism, but you just have to take every day as it comes, as the journey of a thousand steps always begins with the first one, and that is how I have taken this challenge. Success comes from solving every business problem as they happen, and driving the business plan forward.

VIA SATELLITE: What are your three personal highlights of being CEO of Iridium?

Desch: There have been a lot of great days here. I remember the first day I interviewed for the job, the COO at the time came in and told me that I didn’t need to worry about funding Iridium NEXT, as hosted payloads would pay for everything. “I have my eyes on a couple of potential customers who want to use Iridium, and they have lots of money,” he said. Six years later, we finally came up with a concept that was self-financed. That concept was also revolutionary. The Aireon JV that we created to track airplanes will go down in history as one of the most innovative and transformative business creations to come from the satellite industry. It will be remembered for a long time. I have a lot of personal pride in terms of creating Aireon.

Another highlight would be when I got to Iridium, our network had been designed to last 7 to 9 years, and I arrived in year seven. I was told that based on the experience the company had developed, it should last about 17 to 18 years, and maybe longer if we could stay creative and active in managing it effectively. In the end, it lasted 21 to 22 years, and we needed every one of those years. I thank my operations team for their ingenuity. I thank the designers of the original satellites who made them so flexible. I thank some good luck on the way, as well. However, I don’t thank the dead, Russian zombie satellite that hit one of ours along the way.

Third, I would probably have to say that I will always remember my first launch. The overall experience is like a rite of passage in the satellite industry, especially when you have spent so much time and effort and when hundreds of millions of dollars are at stake. Everyone focuses on the booster and getting the satellites into orbit, but as they come off the dispenser, you wonder if they will work. You say to yourself, “You have tested them thoroughly, but will they work in space? Is there a flaw that they have in them which makes them a total waste of energy?” I don’t think in my career I have ever had so much emotion boiled down into such an intense period of 73 minutes. I will never forget that feeling. The relief was tremendous. For someone who is fairly stoic like I am, that was pretty emotional moment.

VIA SATELLITE: The first launch is quite an emotional experience, particularly when you have so much invested in it.

Desch: I was inspired by the Mercury space program. John Glenn was also from Ohio like me. When he shot up in a Mercury capsule, that was exciting to watch for a lot of people around the world, but imagine if you were Annie Glenn, his wife. Like her, you’re invested in a whole different way. This was not just a scientific activity and something that was cool. It was potentially life changing. I probably felt a bit like what Annie Glenn must have felt, because you have put so much effort to get to that point, and it feels your children up there on the top of that rocket. You’ve essentially arrived at a major fork in the road for the company. If it succeeds, you go down one path, and if it doesn’t, you’ll need to regroup and find a different path, but it could be difficult if not disastrous. You can’t understate the emotions you feel as your precious satellites go up into space.

VIA SATELLITE: What do you see as the next big opportunity for Iridium?

Desch: We introduced Iridium Certus because Iridium NEXT allowed us to finally deliver a unique and powerful L-band broadband service. Everyone seems to appreciate that it will be very successful in the aviation, maritime and land markets for high-speed services. It won’t compete with the commodity broadband services, like existing Very Small Aperture Terminal (VSAT) players or what new LEO players are looking to do, but it will be able to be very effective, very low-cost, and very successful in filling an important niche in the market. What I don’t think people appreciate, is that the same technology we call Iridium Certus, scales down in mobility and cost, as it scales up in terms of speed. We have been loosely calling the scaled down version “Iridium Certus Narrowband” - not a fancy name, but I don’t think people appreciate the power of being able to optimize our L-band services scaled down to applications that can be tens of dollars in cost, but still be able to provide much higher speeds than today. So, we can start adding richer data streams such as pictures, video, and messaging capabilities in their native platforms, and email in its most broad form. And, we can do it extremely cost-effectively, and scale it down to be highly mobile and even to one individual user. VS