Insights from the 2022 Hyperdrive Space Summit

The Hyperspace Challenge took one giant leap for startup-kind last November, holding its first Hyperdrive Space Summit since the annual business accelerator launched in 2018. While keeping true to its core value of tight-knit collaboration, the two-day event, hosted in Albuquerque, N.M., marked a dynamic evolution of scope and scale for the well-known Hyperspace Challenge. Organizers brought together 150 startup founders and staff, investors, members of academia, and government innovators from across the country to celebrate space exploration successes, share progress in innovation, and immerse in a one-of-a-kind opportunity to forge deeper government and commercial relationships.

Central to the summit’s program were two panels titled Is the Future Now? When Creative Vision and Market Readiness Collide and How to Make Money in Space. Each panel welcomed subject matter experts selected for their unique and varied perspectives. With a goal of offering startups beneficial information to help grow their businesses in the face of a quickly evolving space ecosystem, the lively discussions were packed with both practical advice and aspirational outlooks. Below are some of the top thoughts that emerged from panelists during the discussion.

Is the Future Now? When Creative Vision and Market Readiness Collide

Developed to explore the topic of space as an emerging market, participants, moderated by Ellen Chang, vice president of ventures for the global advisory firm BMNT, and the head of the organization’s innovation accelerator H4XLabs, provided salient responses about the projected size of the space industry, existing and foreseeable gaps, and why this is an opportune time to be a space sector innovator:

Joel Sercel is the founder and CEO of TransAstra, an orbital logistics company developing technology to find, prospect, harvest and use space resources:

This is the beginning of the true Space Age. With the cost of launch coming down in the next few years, well below $1,000 a kilogram, many business models are opening up, as cost has a direct impact on accessibility and scalability. That would have been impossible before. We are projecting 100,000 satellites in LEO (Low Earth orbit) by the end of the decade. This provides outstanding opportunities and challenges such that all these business models that didn’t make any sense before start to make sense now. At the same time, it creates problems like orbital debris clean-up, space domain awareness, satellite servicing, material processing. So, manufacturing technology and computer aid design and engineering are vastly reducing the cost of development to hardware operations. In fact, the low-cost launch is largely being enabled by these other ancillary supporting technologies. And any company that’s not doing those things is absolutely not going to be competitive. The market will demonstrate that as we move forward.

Brett E. Silcox is the director of government relations at Astroscale U.S. Inc. which provides satellite life-extension and other on-orbit services:

The industry is experiencing huge inertia from policy right now. Policy is colliding to align behind new activities to build a space economy in a way that has never happened before. Just recently, the National Space Council held a listening session to figure out what private industry is building, asking how the council can streamline companies’ ability to get those systems in space, get them in orbit, and get them licensed. Orbital Prime just made 126 awards, and NASA is about to announce the NASA Ignite awards. So, you’ve got government money flowing into these activities that government has never been involved with before. You’ve got the government trying to figure out how to streamline and to make sure that the market share stays here in the U.S. versus jumping to another country that has the ability to streamline as fast as possible. And on top of that, you have companies bringing innovative solutions to government customers.

Peter Wegner is the chief technology officer at BlackSky, a leading provider of real-time geospatial intelligence:

I think maybe for the first time we’re really seeing the space domain emerge as an economic zone, or merge with the terrestrial environment as an economic zone. I think the next thing that’s going to arise, just as you see in the terrestrial domain, is companies paying for intelligence. They want to understand market intelligence, what their competitors are doing in space: Company X just launched a thousand satellites. Do those satellites really work? How many of them are operating? How are those companies performing financially? So, I think that’s really where the money is, it is in converting all of that into market intelligence. If you can provide operators on the ground all over the world with real-time intelligence about what is happening around them via space capabilities and integrate that with analytics, you can commercialize that. This kind of capability, which not so long ago existed only in the deepest, darkest, classified parts of the U.S. government, is now possible in the private sector. Space gives you this unique vantage point and the power to fundamentally change operations on the planet.

DJ Hayes is the director of business development at Orbit Fab, a company working to be the leading satellite refueling service provider for LEO, GEO, and cislunar space:

As the government is trying to work with startups, they’re asking founders if their companies can provide enabling technologies (such as refueling) cheaper, better, and faster than what government can produce internally. They want all three. That’s really what our country needs at this point of strategic competition with countries like China. Space demonstrations from other countries are really compelling us to move quicker and field these capabilities so we can have more resilient space architecture.

How to Make Money in Space

The Hyperdrive Space Summit’s second core panel provided an assessment of the market economy, explored access to funds, and offered ideas for how to make innovation efforts profitable. Participants were investors and venture capitalists who specialize in the space industry. Dan Chi of Ashpool Consulting served as moderator of the speakers, each of whom offered key takeaways about the bottom line:


George Pullen is the chief economist at Milky Way Economy, a boutique think tank providing consulting, education, and awareness services for the fifth industrial revolution, the Space Economy:

The space market is flipping from being driven by government to being driven by commercial innovation and investment. For example, the U.S. Space Force is about to have a budget bigger than NASA’s. So, my first piece of advice for a company with space solutions is to make sure you’re talking to the right audience and to know your market. Then, understand the ABCs of space, or DEFs in this case. D: It’s deadly. It wants to kill you and it wants to kill my money. E: It takes expertise. F: Make sure your finances are in order. Make sure you know who you’re pitching. Make sure you know their check sizes. Make sure you know what you’re putting in for when you see a tender. Make sure you know what dollar amount you’re asking for. If you see words like “deep tech” in a VC’s vision or mission statement, you should be talking to them; they need to see your pitch, because right now they might not have any exposure to space. You need to explain to them how space is deep tech. They need to see that you fit in their investment policy statement already and that it makes sense for you to go to the stars together.

Leon Alkalai is the CEO of Mandala Space Ventures, a venture studio for space start-ups focused on the growing commercial space economy and solving problems on Earth using space technology:

I personally believe that we are at the very beginning of a revolution in space, whether it’s the emerging LEO economy or the lunar economy, there is a huge opportunity for the commercial sector now and for decades to come. My best advice is for companies to have dual-use applications in their business model. They will perform better than if they are either just government or just commercial. This helps to build in resiliency.

My other advice is to track your runway carefully. How much revenue are you building, and what is your runway until the next funding round? At Mandala we are encouraging portfolio companies to adjust their internal spendings and their strategy to extend that runway to be prepared for worst-case scenarios. If this recession or this economy persists, fundraising is going to slow down tremendously. It has already slowed down considerably. On the other hand, we’ve seen continued investment in early-stage companies; we don’t think that has slowed down at all. So, seed or series A funding is going quite strong. Later stage investments, especially those that are capital expenditure intensive, have been running into more challenges.

Cody Willard is the founder and hedge fund manager at 10,000 Days Capital Management, which manages investments across the technology ecosystem:

The U.S. economy is measured in tens of trillions of dollars. By 2040, I fully expect the space economy to be bigger than the entire planetary economy, essentially double. We’re talking 100 percent growth in space alone over the next 20 to 25, 30 years. That’s partly because the cost of getting to space is becoming de minimis, so what you can do in space is advancing and innovating in a revolutionary way. And these things are going to accelerate faster and faster. It’s just a matter of funding.

Clearly the cycle on that has turned. We recently had what I call the biggest bubble in the history of the planet. What just ended was historic. Valuations of $30 billion for companies that three days later are bankrupt is not a normal cycle, and those valuations aren’t coming back anytime soon. The cycle recession is here. Governments are the most active in this industry right now, whereas VCs aren’t writing checks during this capital crunch. But the good news is that space itself is secularly growing. Everybody knows that every CEO, whether it’s at Coca-Cola or IBM or Hewlett Packard or Intel, is looking for space strategies, recognizing that in the next five, 10, 15, 20 years, they’re going to have to be using space in their businesses. They want to be in space; they want to be involved. So, there is no easy answer, but there will be a point where the floodgates will open back up. And I think space will be the first industry that will be easily raising money. That doesn’t alleviate the fact that capital is going to be hard to come by for a little while as we go through this part of the cycle.

In sum, panelists agreed that the cost of doing business in space is coming down and innovation is happening quickly. As a result, opportunities for startups are increasing, with customers in both the private and government sectors eager for services and products. Though the government remains a stalwart funder, the development of new technologies is increasingly being led by industry. Policy, too, is beginning to line up more closely with commercial activities. Based on these trajectories, the Hyperdrive Space Summit panelists forecast seems positive. The space economy is poised to thrive, even as a recession looms, and as the panelists stated unequivocally, there has never been a better time to start or grow a space company.