Universities and Space Incubators: Fostering SmallSat Growth

The start-up culture is alive and well in the small satellite sector. As more-affordable and quick-to-build SmallSats take off for commercial and government purposes alike, new businesses are staking their claim in the industry. But with the National Venture Capital Association estimating that 25 to 30 of venture-backed businesses failing, what does it take to create and drive start-up culture, and what are organizations doing to ensure the entrepreneurial spirit of these new ventures thrives throughout the space sector?

There are more ways than ever before for entrepreneurs to get introduced to the space business. An ever-growing number of universities have students building CubeSats before they graduate. Government organizations such as NASA are partnering with academia on more projects every year, while the European Space Agency (ESA) is setting up incubation centers to support entrepreneurs in turning space-connected business ideas into commercial companies. Meanwhile, the Silicon Valley Space Center (SVSC) host seminars where they vet business plans from prospective entrepreneurs.

NASA has identified the advantages of working together with universities and has launched efforts to collaborate with colleges across the world in conjunction with the organization’s Small Spacecraft Technology Program. The SmallSat Technology Partnerships program has issued three calls for proposals to universities in 2013, 2015 and 2016. Selected university teams are awarded up to $100,000 each per year. In addition, NASA funds the time for one of its employee to work with each selected team. The partnerships that result from selected proposals aim to engage university students and graduate researchers in advancing technology of value to NASA and the nation, and help strengthen the organization’s workforce.

“We decided to reach out to universities with the SmallSat-university partnerships because the universities were already heavily involved in designing and building small spacecraft — particularly with CubeSats — and we recognized that,” Andrew Petro, program executive for NASA’s Small Spacecraft Technology Program, tells Via Satellite. “It was a good two-way partnership where we would benefit from new ideas and their approach, and they would benefit from the knowledge that NASA could share, and it could lead to more projects in which the new ideas and new technologies would find their way into missions by NASA and by industry.”

Indeed the partnerships are sprouting new satellite technologies that, in turn, spawn small businesses and start ups in the space industry. The first iteration of the SmallSat technology partnerships, which occurred in August 2013, resulted in 13 projects across many technical disciplines. According to NASA, 11 of those projects continued at least into a second year while two of the projects were selected for NASA-sponsored rides into orbit. The selected projects include a team from Montana State University working with NASA's Goddard Space Flight Center in Greenbelt, Maryland, on a radiation-tolerant processor for SmallSats; and a team from California State University, Northridge, working with NASA's Jet Propulsion Laboratory in Pasadena, California, on a SmallSat demonstration of an advanced energy storage system.

“We don’t expect all of these SmallSat tech partnerships to result in spaceflights. We are happy if they are focused on a particular component, subsystem or technology and they develop that further during the course of their one-to-two year project,” says Petro. “But some do result in spaceflights and that is a nice outcome.”

One that will result in spaceflight is the agency’s first foray into a university SmallSat partnership. In November, the University of Michigan, in conjunction with NASA, is scheduled to launch a constellation of eight microsatellites for use in NASA’s Cyclone Global Navigation Satellite System (CYGNSS) mission, which aims to improve hurricane forecasting. The mission will be the first in NASA’s history to make use of a constellation of small satellites. CYGNSS was formed through another program — a science mission called Earth Venture the agency began five years ago to encourage university groups and others outside of the usual NASA field centers to consider working with NASA on smaller and more unusual types of missions, such as SmallSats.

Chris Ruf, CYGNSS principal investigator at the University of Michigan, says that CubeSat science is particularly amenable to “things that change quickly,” because you can fly several at once. As the technology becomes more reliable, he says it is natural for NASA to begin working with SmallSats.

Most importantly, building and operating the satellites garners great experience for his students, who are involved with everything from the design, building and testing of new kinds of SmallSats to analysis of the instruments on the satellites, and using the data to study the Earth.

“I think the best type of research organization is one that is involved in all of these aspects of a mission: from the technology of the individual satellite subsystems, through the systems engineering that integrates them together, to the scientists who use the measurements to understand the Earth better and, in the case of CYGNSS, to improve weather forecasts of hurricanes,” Ruf tells Via Satellite.

Moreover, working with NASA on a satellite program gives the student’s work greater recognition in the scientific community.

“The impact on our university and students is huge. We are defining the cutting edge of a new type of space mission and our students are working in the heart of that development,” explains Ruf.

SmallSats are particularly adept to these types of partnerships because the spacecraft are less complex, less time intensive and have a much shorter timespan from concept to orbit. This allows all stakeholders to reduce the cost of the missions, thus allowing them to take more risks and launch more often, shortening the learning curve on new tech significantly.

“For an organization like NASA, to see projects through their lifecycle is a very valuable thing because you are learning faster. You learn a lot from going through the process of idea to flying the satellite. It is a much more rapid way of learning than to take 10 or 15 years to do a single project, which tends to be the case with really, really large projects, the kinds of things that the government and large industry does,” says Petro.

Ruf notes that the fabrication and testing of the CYGNSS mission was very similar to those of larger traditional missions, but by building CubeSats the university completed the mission build quicker and cheaper.

“We designed the satellites to be just big enough to provide our science instrument with the necessary power, thermal environment, pointing accuracy, data telemetry, etc.,” says Ruf. “Because the satellites are so small, we are able to build and operate eight of them for much less cost than a single typical medium-sized satellite.”

By building eight spacecraft, Ruf says they can see every spot on Earth much more often, which in turn allows them to resolve very rapid changes in weather, such as hurricanes and other severe storms.

Petro finds that using SmallSat tech as “test runs” for larger spacecraft allows NASA to move technology forward faster.

“For the larger projects, these SmallSats prove to be the keystone for everything,” says Petro. “Our purpose is to develop the fundamental capabilities of satellites: the communications power, propulsion — all the fundamentals of spacecraft capability that are useful to any kind of application that people have.”

In the next couple of months, Petro noted that NASA, through its SmallSat Technology Program, is going to be flying CubeSat-scale spacecraft missions that will prove to be benchmarks for larger satellites. These missions include: laser communications from orbit-to-ground, high-data-rate communications, flying a high-gain antenna on a CubeSat, and testing two CubeSats that will perform a rendezvous and docking while in orbit.

“We are really trying to push the envelope of the capabilities of these very small spacecraft. That is our core activity and we are supplementing it with the university partnerships,” Petro says.

Because of the lower barriers to entry into the space market — including less startup capital and more potential for return on investment when compared to traditional satellites — small businesses and startups are also turning to small satellites. A glaring success story is Planet (Previously Labs), a company out of California’s Silicon Valley that is in the process of building and launching hundreds of CubeSats for Earth Observation. Not all startup companies are such success stories, however, and many, if not all startups require help when it comes to securing investment, finding facilities, understanding business and remaining afloat long enough to see a return on initial investment. This is where incubation centers, facilities where new and small businesses join to foster growth, come into play.

One such incubator is ESA’s Business Incubation Center (BIC) program. Iterations of ESA BICs have popped up in just over a dozen countries across Europe, guiding entrepreneurs through the process of converting ideas into companies, with beneficial technical expertise and business-development support.

“We provide the entrepreneurs help with logistics, such as office space. We also offer technical support from our ESA establishments — because we have the manpower and support available that they may not — or [from] other local space agencies that we partner with, such as the French and German space agencies, which can offer local support. We also offer access to finance because, when you are selected by one of the ESA BIC selection committees, you can get access to up to 100,000 euros ($110.000). Last, we offer access to international networking as well as access to potential business partners,” explains Bruno Naulais, European space incubators network manager at ESA.

The ESA BICs network currently consists of 16 incubation centers in 13 countries and has 420 companies registered, two-thirds of which are involved in space systems applications such as Earth observation, navigation and telecommunications. Naulais says the incubators have received about 650 applications since opening in 2003.

While Naulais is careful to note that the aerospace sector has done well in the last few years and that it is less costly than ever before to build and launch a small satellite, he believes the SmallSat market is too competitive for many startups to succeed.

“Unfortunately, we find most of [the SmallSat startups] will not go beyond two or three years of development because it is very tough, this world of SmallSat development. There are a lot of big players, such as OneWeb or Planet Labs,” Naulais says. “We would like to see a European player emerge because all of the large SmallSat players are U.S.-based, but I am not very confident because it is difficult to see return on investment for the overall end-to-end service provision, which includes the manufacturing of the constellation, maintenance, operation, and so on.”

For this reason ESA BIC often doesn’t support startups that plan to build the spacecraft technology themselves, but will accept members who wish to provide a service through satellite technology, such as remote sensing or Earth observation.

“We don’t fund the machine, but we do fund the service issued from the machine,” he says.

Sean Casey, co-founder and managing director of SVSC, disagrees, however, and finds that the time is ripe for entrepreneurs in the SmallSat segment.

“Planet Labs has demonstrated the success of the SmallSat form factor,” Casey tells Via Satellite. “But there are a lot of other technologies that are out there that can grow other companies. And these might not be high-risk technologies, but they can be uniquely designed to address a particular market; it will be up to the entrepreneur to figure out what part of the market is not being addressed. There is a lot of room for people to play in SmallSat technology and figure out if there is a market for their particular approach.”

The SVSC team operates as a business accelerator for new space technology startups, acting as consultants for the entrepreneurs and supplying them with access to funding and, in some cases, funding from the SVSC in exchange for equity in the growing company. The company got its start in 2009 by helping a team involved in the Google Lunar Xprize, a challenge that calls for spaceflight teams to develop cost-effective and reliable access to the Moon.

Since launching incubator operations through the SVSC in 2011, Casey and the center’s team have worked with roughly a dozen space start-ups, about half of which he says are still functioning. The company also holds seminars where they vet and critique business plans from prospective entrepreneurs, as well as detail the emerging NewSpace business playing field.

Over the last couple of years, Casey says the company has pivoted its focus from assisting startups in suborbital spaceflight to Low Earth Orbit (LEO) technology.

“Geospatial intelligence, such as imaging and analysis, and communications — those are the two areas that seem to be getting traction over the last couple of years,” says Casey.

He also believes that SmallSats in particular are seeing growth across the industry — a growth he expects will continue going forward.

“We have seen a continued development of small satellite companies,” says Casey, pointing to companies such as Terra Bella, Planet, and Spire, among others that have been pulling in large amounts of funding to the tune of tens of millions of dollars in just the last two to three years alone. “Those investors that were early to Planet Labs are working on the [Return on Investment] ROI. In the meantime, you have other investors showing up to observe where the other action in the satellite technologies space might be. What the industry is waiting for is an ROI.”

And while ROI for all SmallSat technologies is not yet clear, Casey feels there is plenty of investment and business opportunity for SmallSat technologies and constellations, particularly as the industry finds opportunities outside the space sector.

“We are starting to see, from some of the other small satellite builders, non-traditional space customers show up and contemplate launching their own constellation,” says Casey, who also urges patience when it comes to investing in this space. “NewSpace is a 100-year play.” VS