We explore building the Berkshire Hathaway of outer space. We’re joined by Dylan Taylor, Founder and CEO of Voyager Space Holdings. We cover the evolution of space technology, private space companies vs. the government, and exciting innovations in the space industry.
We explore building the Berkshire Hathaway of outer space. We’re joined by Dylan Taylor, Founder and CEO of Voyager Space Holdings. We cover the evolution of space technology, private space companies vs. the government, and exciting innovations in the space industry.
“I’m in the camp that is super passionate about space as a tool for transformation. So what energizes me is getting humans into space.” — Dylan Taylor
EPISODE GUIDE (LINKS, QUOTES, NOTES, AND BOOKS MENTIONED)
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This episode is our definitive guide to building the Berkshire Hathaway of outer space. In it we cover:
ABOUT DYLAN TAYLOR AND VOYAGER SPACE HOLDINGS
In 2019, PitchBook named Dylan Taylor one of the top 10 investors in space and space technology. While SpaceX, Virgin, Galactic, and Blue Origin have taken off in recent years, Dylan's been investing in outer space for over a decade. First, as an angel, and now as CEO of Voyager Space Holdings, where he's building the Berkshire Hathaway of space holding companies.
Dylan has also served as the CEO of a public company, he's been on numerous boards, and he runs his own space-focused nonprofit called Space for Humanity. Dylan is a wealth of wisdom, and this episode is a masterclass on the past, present and future of outer space.
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ABOUT OUTLIER ACADEMY
Learn timeless lessons on work and life from iconic founders, world-renown investors, and bestselling authors. Outlier Academy is the forever school for those chasing greatness. Past guests include Gokul Rajaram of DoorDash, Scott Belsky of Benchmark and Adobe, Joey Krug of Pantera Capital, Mark Sisson of Primal Kitchen, Luke Gromen of The Forest for the Trees, and Brian Scudamore of 1-800-GOT-JUNK.
ABOUT DANIEL SCRIVNER
Outlier Academy is hosted by Daniel Scrivner. Over the last 15 years, Daniel has led design teams at Square and Apple, turned around a $3M+ ARR SaaS business, and invested in more than 100 companies. He launched Outlier Academy in 2020 to learn from the world’s best founders, investors, authors, and peak performance experts.
Daniel Scrivner (00:00:05):
Welcome to another episode of Outliers. I'm your host, Daniel Scrivner, and today, we've got a blockbuster show for you. On Outliers, I decode what the top 1% of performers across industries have mastered and what they've learned along the way. In each episode, I dive deep to uncover the tools, habits, and ideas that we can all apply in our own lives. Today, I'm talking to Dylan Taylor. In 2019, PitchBook named him one of the top 10 investors in space and space technology. While SpaceX, Virgin, Galactic, and Blue Origin have taken off in recent years, Dylan's been investing in outer space for over a decade. First, as an angel, and now as CEO of Voyager Space Holdings, where he's building the Berkshire Hathaway of space holding companies.
Daniel Scrivner (00:00:51):
That's not even scratching the tip of the iceberg. As Dylan's also served as the CEO of a public company, he's been on numerous boards, and he runs his own space focused nonprofit called Space for Humanity. Dylan is a wealth of wisdom, and this episode is a masterclass on the past, present and future of outer space. Please enjoy this incredible conversation with Dylan Taylor.
Daniel Scrivner (00:01:17):
Dylan. I am so excited to have you on the show. Welcome to Outliers.
Dylan Taylor (00:01:21):
Thank you, Daniel. It's my pleasure. My pleasure, my honor to be here.
Daniel Scrivner (00:01:24):
Wherein throughout the course of this episode, we're going to do a super deep dive into space technology and the space sector in general and what that is shaping up to look like and what you're building at Voyager Space Holdings, so there's a lot we're going to cover, but what I wanted to do to maybe set a little bit of context for everybody is just take a little bit of a step back, and if you could help share a little bit of how you first got interested in space and how that fascination has changed and evolved over time.
Dylan Taylor (00:01:55):
Sure. Oh yeah. I'd love to. Yeah. It's interesting. Like a lot of folks, perhaps, that have had some success in whatever endeavor they set out to do originally, I found myself in a situation, probably in my late 30s, I'm 49 now, where I was kind of looking around saying, okay, I've had some success in the business world, I've set out and achieved a lot of the things I thought I wanted to achieve in my career, but I was left wanting, to be honest about it, Daniel, and I was really looking around saying, okay, is this it? What's the purpose of all of this? I had a very influential book that I read at that time. I don't know if you ever read The Last Lecture.
Daniel Scrivner (00:02:38):
Dylan Taylor (00:02:39):
It's definitely worth reading, and I won't spoil it for you or the audience. It's actually an actual lecture. You can watch on YouTube as well, that essentially, what it challenges you to do is really probe your psyche, and in particular, kind of the early years of your life, and really reflect on, what are you truly passionate about? What really creates that fire within you? For me, it always had been, always had been space. Whether it's the thrill of the exploration of space or sort of the scientific discovery associated with space, or kind of the heroic nature of space. It was really all those things wrapped into one. I had met someone who was very influential in my life at the World Economic Forum, the meeting in Davos, about this time, a gentleman named Eric Anderson. Eric was notable in so far as he founded the company that allowed tourists to go to the International Space Station.
Dylan Taylor (00:03:39):
Eric and I became close friends, and I told Eric, I said, "Look, I've had this realization that I'm super passionate about space. I really want to get plugged into the industry. What would you suggest? How could you help me fulfill that?" Essentially, what we came up with was the industry really was plugged or blocked, for lack of a better word, at the early stage capital formation of the capital life cycle. In other words, companies just weren't getting formed. This is sort of 2008, 2009, and there wasn't a lot of early stage capital available. Long story short, I reflected on, okay, I want to get plugged into this space industry. I'm super passionate about it. I always approach things from the vantage point of, what skillset can I bring to the table, and how can I add value? In discussing it with Eric and others, we determined, the industry really needs that early stage capital.
Dylan Taylor (00:04:37):
Then, with respect, I'll say this, I don't mean this to sound negative or condescending, but at that time, and still today, this persist, space is really exemplified by super brilliant, technical minds, but not necessarily folks that have a lot of business experience or business acumen. So, the thought was, can I bring some early stage capital to play? Can I bring some business acumen? Because I had some experience running large global companies, kind of bring that to the fold in, let's say a business mentorship arrangement and add some value to the industry. That's how I initially got involved. Just the more I got involved in the industry, the more my passion really was validated, and ultimately, have moved into the industry full-time. But there were several years where I was kind of bridging that gap between my true passion and really sort of my day job for lack of a better term.
Daniel Scrivner (00:05:33):
No, that makes sense. You mentioned, I know this about you, that you're just fascinated by and captivated by space. Is there a defining moment early in your life? Was there something that just kind of hooked you and grabbed you early on?
Dylan Taylor (00:05:50):
Yeah, I've reflected on that question a lot. I think there are two answers to that. The first is my earliest memory of space was actually with my father who has a technical background. He's actually a college professor, PhD in multiple degrees in math and engineering and science, but my earliest memory is watching Star Trek with him. I was probably three. It would have been, I guess, 1973, but I do remember that. I just remember the awe and wonder of sort of the undiscovered. I think fundamentally for me, it's really that exploration discovery piece, but then later in my life, I got deeply into meditation and sort of the ... just again, this is the notion of discovery, discovering the mind, discovering sort of the inner workings of how we think, how we reflect spiritual practices, things of that nature. I got deeply into meditation. One of the things I observed or perceived was that space probably is, and I'll even say it is definitively, the most fundamental tool for transformation that humans are aware of.
Dylan Taylor (00:07:06):
What do I mean by that? What I mean by that is there's very few paradigms where you can get out of the fishbowl, and reflect on the fact that you're a fish in the water. If you talk to astronauts, and I've had the pleasure to get to know many, in fact, we have several on the board of my company, to a person, whether a male or female, West or East, capitalist or communist, it doesn't really matter, to a person, they reflect on how powerful space and that experience has been in changing the way they view the world, the way they view humanity. I would say that the second sort of aha was that space really fundamentally is the way humans, humanity can deal with some of these problems, which we think are intractable or insolvable or insoluble. I think it's fundamentally because we lack perspective.
Dylan Taylor (00:08:07):
The way to get perspective, certainly you can send the world to meditation camp for a couple of months. That's not very practical. Some people believe in psychedelics as a gateway. I won't poo-poo that, but that's not necessarily for me, but I think the whole notion of space and this so-called overview effect, which was coined by author, Frank White, I think it's very powerful. I think it's very powerful. I think fundamentally, the world, as we move into space and as we venture into the stars, I think we have the ability to reimagine what it means to be human. My hope is that it's not just a copy paste of what we have. It's a re-imagining of what we could be.
Daniel Scrivner (00:08:50):
Yeah. It certainly seems like part of that could be just an evolution to seeing ourselves as an interconnected species, as opposed to a bunch of warring, fighting, disagreeing, trying to cooperate countries around the world.
Dylan Taylor (00:09:05):
Indeed, and I think 2020's been rough, COVID's been tough on everybody, but I think, if nothing else, it's reminded us that we're all in this together. There is no other, there is no there that doesn't ultimately impact here. We're all joined at the hip.
Daniel Scrivner (00:09:22):
Absolutely. I want to talk a little bit about some of your earlier angel investing in the space technology space. In 2019, I know PitchBook named you one of the top 10 investors in space technology, and that was over the previous 10 years, which is a remarkable feat, especially since at that time, this was a passion for you, but you were just investing your own capital. Can you talk a little bit about how you've seen the space evolve over the last 10 years, and some of what those early investments looked like, and what you learned along the way, and have you seen that evolve at all over the last 10 years?
Dylan Taylor (00:10:00):
Yeah, no, I have. Certainly, the business plans have gotten way better or way more sophisticated. We now have some second and third generation entrepreneurs in the industry, people founding their second and third company. That's all evolved over the last 10 years, but in the very early days, it really was ... I don't know what the correct term would be, but I wrote some checks that I know I would never see the money back. You would ask yourself, well, why would you do that? You're not doing the industry any favors, and perhaps you could make that argument. But at the time, really, what I was trying to do is I was trying to build confidence, and I was trying to build confidence in the industry that these business plans potentially could ultimately generate value. But more importantly, that the entrepreneurs, that their ideas had value, that the notion of entrepreneurialism, the notion of quitting your job at Lockheed Martin and giving it a go and maxing your credit cards out to bootstrap something had value.
Dylan Taylor (00:10:59):
I was trying to demonstrate that. I was also trying to demonstrate other values that I think are important, like female led founders, which I think is critical. I went out of my way to try to back female-led companies as well. That's really what I was trying to do in the early days, was shepherding along some of these individuals that just honestly needed a yes. They just needed a yes. Lo and behold, what I found was, what ended up happening, you have these entrepreneurs who have been stuck in a rut for a long time, or were on the verge of maybe throwing in the towel, and all of a sudden, they had a swagger to them, and they had a sort of a near term purpose on how to deploy that capital, what that next milestone would be. Of course, that energized me, because as somebody really enjoys mentorship, seeing that spark in the team's eyes and seeing them have the confidence to start to execute on their business plan, and confidence breeds confidence.
Dylan Taylor (00:11:58):
Really, I was just trying to provide some kindling, if you will, for the industry, and just get the industry off the ground, and attract other angels to come into these more riskier ventures. Now, lo and behold, a lot of these early investments ended up being very good investments, but like with a lot of angel capital, it really is hit or miss. I talk to folks sometimes within the ecosystem saying, "Well, I'm interested in angel investing. I'm thinking about making a couple of angel investments." I tell them, I said, "Look, if your strategy is to make a couple of angel investments, I highly, highly, highly recommend against that. Because unless you can make eight or nine or 10, probably 10 minimum. No one on planet earth that I've met, maybe this person exists. But no one on planet earth that I've met is smart enough to pick a single angel investment and be right with any level of certainty.
Dylan Taylor (00:12:53):
Either the best teams fail, the worst team succeed and everything in between. Unless you take a portfolio approach, and unless you are smart about the way you structure your early stage deals, for example, investing on or insisting on pro-rata rights, where you can double down on your winners. I think angel investing for most people is really foolhardy unless you take that approach. It is interesting Daniel. At the end of the day, it ended up being a financial success, but I wouldn't have expected that at the time. Frankly, it wasn't really about that. It was more about getting the industry to a stage where other investors felt comfortable getting more involved. That's how we approached it. Then, it's interesting, people at the time were eliminating the fact there wasn't enough VC within space.
Dylan Taylor (00:13:47):
Of course, I'm trying to explain to folks, well, look, it's like salmon jumping upstream. The only way you're going to get salmon upstream is to have lots and lots and lots of salmon jumping. Frankly, there's just no companies that have reached that stage of evolution. But thankfully, we were able to get a lot of companies capitalized, the industry developed, and then we had companies like Sequoia and other very well known VCs come into the industry, which has been great to see.
Daniel Scrivner (00:14:16):
Yeah, and it seems like lately there's just been a return of optimism around space. I'm 34, but I don't have any vivid memories early in life of just some of the incredible accomplishments that happened a little bit earlier on. I'm curious, have you felt that? Have you seen that? Was there an ebb, where there just wasn't a lot going on, there was a little bit of a lack of optimism? Clearly a little bit of a lack of private sector leadership. It seems like that's now returning, but I'm curious how optimism and pessimism and a little bit of that lull, in terms of just passion and excitement and interest in space, how you've seen that play out over time.
Dylan Taylor (00:14:59):
Right. Well, I think it's really exploded in the last ... that's probably the wrong verb actually. It's really taken off, maybe that's a better verb, here in the last, call it 36 months. SpaceX, I've got to give Elon and his team, Gwen, in particular, the President of SpaceX credit. They've really redefined and re-imagined space and made it super exciting with the re-usability, and perhaps we can spend some time during the conversation talking about how transformational that is, but seeing boosters re-land on the pad has captivated everyone's imagination. Sending a Tesla Roadster on a Mars' orbit has captured everyone's imagination. Sending humans, actual astronauts, not on a Russian rocket, which we've been flying on for the last 12 years or longer, but a US made commercial space vehicle to the International Space Station and returning them home safely, that's remarkable.
Dylan Taylor (00:16:02):
That's remarkable. I would say the number of inbound calls I've gotten from people I know who aren't necessarily following the space race on a daily basis saying, "This is unbelievable, I'm inspired, I'm joyful. How do I buy SpaceX shares?" I mean, it's shocking, Daniel, how frequent that occurs now. I think you're absolutely right. I think it's a renaissance right now for a space, not only in the US, but around the world. I mean, we had three Mars launches in the month of July. One of those was by the UAE, a small country, wealthy, but small country in the middle East doing a Mars mission. I think that's extraordinary. We've got a lot of really fun and exciting things happening. To your point, I think there was a period of time where the industry lacked self-confidence.
Dylan Taylor (00:16:55):
We had some early failures, whether it was the last space shuttle that ultimately killed the space shuttle program, or whether it was the Virgin Galactic SpaceShipOne that suffered an accident and a fatality. The fact that the US, in particular, could not get astronauts to and from the Space Station without flying on Russian rockets. I think there were a lot of these things that you could point to, to say, we're actually probably working backwards, not forwards in the space race, but that has all definitely changed.
Daniel Scrivner (00:17:25):
Yeah. I would love to touch on what you highlighted there, because as soon as you brought up the re-usability of rockets, medially, that starts to connect a bunch of dots about why we are seeing a renaissance, which is we've gone through what sounds like an awkward transition of space being something that only governments could have enough money and manpower, and power in general, to be able invest in and push forward, to now, obviously technology's advanced, and now we are able to approach it much more economically and focus on things like the re-usability of rockets in order to move it from something that almost has to be government funded to something that now becomes something you can entertain in the private sector. Can you expand on that a little bit? I guess, obviously the SpaceX and the reasonable rockets is one example, but I'm sure you know many others, or you can maybe help connect that to a little bit of a broader context about how you've seen those economics change over time.
Dylan Taylor (00:18:25):
Right. Yeah, it really is extraordinary, Daniel. Imagine flying from Dubai to New York on Emirates, on an Airbus 380, and at the end of that flight, throwing the $420 million airplane away. Imagine that. No one would be able to afford to fly, even if you were a sheek, you wouldn't be able to fly. That's what we've been doing since the Apollo program. I remember very vividly before SpaceX stuck their first booster landing, talking to a friend of mine who happens to be president of one of the large space primes with a launch capability, and super smart guy. I've known him for years. He said, "Dylan, re-usability is a fool's errand. It will never happen. SpaceX is the laughingstock and they're beating down the wrong path." Of course, about probably two months after that conversation, SpaceX stuck their first booster landing.
Dylan Taylor (00:19:27):
They've now done multiple booster landings on the same rocket. They've re flown booster rockets several times. I think at last count, it's 51 of the last 53 attempts, they've landed the booster rocket. Was that individual not an intelligent person? Do they not understand physics? No, it wasn't that at all. It was classic sort of innovator's dilemma. You can't imagine the disruptive power of forces outside of your soap bubble, for lack of a better word, or your bubble. What he lacked was not a knowledge of physics, but he lacked imagination, and he lacked an understanding of how iterative the MVP, the Silicon Valley kind of approach design can be or was. I'm fascinated by that because that's part of a larger theme happening in the industry, is the industry is being disrupted by this new space revolution, if you will.
Dylan Taylor (00:20:24):
But back to re-usability, it's totally changed the game. Just to give you some round numbers. To fly a pound of mass on the space shuttle was $100,000. Imagine a bottle of water, which is sort of, by definition, a pound, 16 ounces of water, it's $100,000 to orbit.
Daniel Scrivner (00:20:44):
Dylan Taylor (00:20:46):
With the Lockheed and ULA rockets, whether that's the Delta rocket or other vehicles that exist, that sort of, call it $10,000 a pound to orbit, round numbers. With what space X has done and re-usability and the like, we're down to call it $3,000 a pound on our way to $1,000 a pound. With other technologies that we think we can roll out, we think we can get that number down to $500 a pound, ultimately. Maybe not to fly humans, but certainly to fly hardware. That's just a shocking increase in performance and decrease in costs. Imagine New York, if you were to look at a picture of Manhattan in 1910, roughly, what you would see is a fairly dense Island with tallest building, probably being about seven or eight stories. Fast forward to 1920, what would you see? Well, you would see a lot of mid-rise, or early forms of the skyscraper. Why is that?
Dylan Taylor (00:21:50):
Did we not know how to build tall buildings in 1910? Well, no, we did actually. We knew how to build tall buildings from 1910. We perfected that over time. But what really changed was the advent of the elevator. That's what changed. People didn't want to walk 20 stories up to their penthouse apartment. So, space is very similar. We've built now the elevator, we can now get mass to orbit in quantity. We're going to launch, Daniel, more satellites in 2020 than the history of our civilization prior to 2020. That's in the middle of a global pandemic. 2021 we'll set another record. We'll put tens of thousands of pieces of hardware in orbit over the next 24 months. It really has changed the game. It's enabled business plans that were only conceptual in nature prior to this launch revolution, and it's really captured the imagination. I had the pleasure of being at that Falcon heavy launch in February of 2018.
Dylan Taylor (00:22:49):
That's the one that had the Roadster on board, and seeing in person those two booster rockets land in synchronicity, it's just unbelievable. It's science fiction and you're rubbing your eyes saying, "Did I just see that happen?" Of course, the answer is yes. It's tremendously exciting. I think that's what's really captured the imagination. At last count, I've heard that SpaceX is getting about 10,000 applications a month. 10,000 applications a month to work there. It's just shocking. Shocking.
Daniel Scrivner (00:23:21):
I'm not surprised at all. The elevator analogy there is incredible. In some ways, it seems like we've brought down the cost of raw ingredients to access space, to get things into space, to get to space. Now we can start focusing more on what we do with that, how we layer on value and how we can ultimately create value and capture value with some of that technology. I'm much less close to the space than you are, but just from my perspective, it seems like between Starlink and some of the other things that's going on there, there's a boom that's happening, incredible wave of innovation that's happening in the satellite space. To take, I guess, a bigger step back, can you just help paint a picture for people of kind of, if you were almost an MBA student, how you would think about the different sub-components of the space technology sector? Yeah, just help people get a better sense.
Daniel Scrivner (00:24:13):
Because I think, from my naive perspective, obviously there's some of the things that are public are things like rocket launches and things like satellite launches, but I know there's a lot more going on, and now there's sectors that are springing up to service other sectors. Can you help paint a picture there of what that looks like and how that's been evolving over the last few years?
Dylan Taylor (00:24:31):
Sure. Yeah. No, happy to. It's interesting. You can look at it from a bunch of different vantage points. Probably the easiest delineation initially is where in space we're talking about. There's really three layers. One is so-called LEO, which is low earth orbit. The second is GEO, which is geosynchronous earth orbit, and the third would be Deep Space. Deep Space would be the moon, Mars, everything in between. Almost everything happening right now is in LEO. The International Space Station is in LEO, all the constellations being delivered right now, with the exception of the very largest telecommunication satellites are all in LEO. That's really where the action is right now. Just focusing on that for a second, the big play really is what I'll call more generally earth observation. Because we built the elevator, and we can get a hardware to orbit that doesn't necessarily need to be designed to last for 10 years, because if the launch costs is one-tenth the cost, you're okay with launching, every couple of years, different hardware.
Dylan Taylor (00:25:42):
You can iterate much more quickly on your hardware, because the cost of putting in an orbit is so much lower. What's happening is you have massive numbers of constellations being put up. Ultimately, think of it as a dataset. If you think about Alphabet, Alphabet, I haven't checked recently, but let's call it, it's a trillion to market cap, roughly. Essentially, what Alphabet has done is they've built a dataset based upon known terrestrial information, and they've organized that, and they can tell you with high certainty, what has occurred. They can generate a map. They can show you what's within that vicinity. They can give you facts and figures about all the folks and businesses and commerce, anything within that range. It's basically known terrestrial information that is factual in nature, and tells you what has happened. Well, imagine, instead, a database that's even more robust than the Google database, that is ubiquitous, meaning it's complete information about the earth.
Dylan Taylor (00:26:47):
It's persistent, meaning it's always on. It's hyperspectral, meaning you get insights from different vantage points. Let's say optical, infrared, there's technology now called synthetic aperture radar, where you can actually look under clouds, look underground to a certain depth. Imagine that entire data set being fed into a cloud, and that cloud being subjected to AI and other tools that we now have, and imagine that, instead of that dataset being historical in telling you what has happened, it's predictive and it tells you what will happen. Imagine that end state. What is that dataset worth? I don't know, but I know it's worth more than the Google dataset for sure. Few trillion, at least, of value. The other way to think about that is we have a $75 trillion global economy, round numbers, COVID notwithstanding.
Dylan Taylor (00:27:44):
If you had perfect real-time information about all commerce on planet earth, could you make the economy 3% more efficient, or 2% more efficient, or 4% more efficient? I think the obvious answer is yes. If that's the case, then again, that gets you several trillion dollars of value creation. The reason I'm bringing all this up is this is why Amazon is building Kuiper, their constellation. It's not only for internet service, which is what the SpaceX Starlink constellation's about. It's about the ability to have hardware and orbit and collect data. Amazon, I should mention, Daniel, is also getting into the ground station business. This is how you get data from space back down to the earth and collect that. They already have the best cloud in the world with AWS, and they probably have the second best AI platform behind IBM. If you look at what they're doing, it's brilliant. It's capturing the entire value chain.
Dylan Taylor (00:28:44):
You get mass to orbit with Blue Origin rockets. You put hardware in orbit that's either disseminating data or collecting data. You get that data back down to earth with a ground station. You put it in the cloud, you subject it to AI, you generate products and services and insights based upon that, and that informs what hardware you iterate to and put back in orbit, and you've captured that entire value chain. This is what's happening. This is why Apple is building a constellation. This is why Facebook is rumored to be building, or considering a constellation. The large data providers see this as an opportunity. When you think about the opportunity, just with ones and zeros, because these are very capital efficient models, I see a multi-trillion dollar opportunity in space. That's all happening in LEO. In that, of course, within LEO, you also have, which I'd love to talk more about later on, is space tourism. The first private Space Station being built. All these things happening within Leo.
Dylan Taylor (00:29:49):
Just super hot bed of activity. By the way, the other business model, and Voyager bought a company that's the leader in this category is we now have a space debris problem. Because everything in orbit is moving at an orbital velocity, 17,000 miles an hour. Even a small screw can take out a satellite very easily or the Space Station for that matter. We now have a space debris problem that we need to get our arms around. Lots, lots, lots happening. I could talk more about GEO and also Deep Space, but really most of the activity right now is happening in low earth orbit.
Daniel Scrivner (00:30:30):
It's fascinating. You talked about, as you mentioned Alphabet, you mentioned Apple, Facebook, Amazon. Maybe just expanding on that a little bit. You're obviously focused on newer entrance into the space. You're focused on disruptive players that are coming in, that are looking to carve out a niche or an area for themselves and expand over time. But obviously, all the names you mentioned are kind of the incumbents, and some of them are maybe a little bit familiar to the sector, and some of them are obviously very new. Just some of those things you brought up there, I had not heard of before. Who do you think has a really interesting, well thought out strategy that's a larger incumbent, that either is new to this space or familiar with this space, and which one of those you think are interesting, or they're onto something where they clearly are playing a little bit of a higher level game of chess and know where this is leading longer term?
Dylan Taylor (00:31:20):
Yeah. Well, that's a great question. I would say it's interesting. Even though Amazon, Apple, Google, Facebook, and all the companies we've been talking about are incumbents within technology, they really are the upstarts within space, for sure, and I think they have a mentality that's different. Maybe it's important to talk about who the old guard is within space. There really isn't oligopoly at the top, and that would be Lockheed Martin, Northrop Grumman, Airbus and Boeing. That's really the big four, if you will, for space. They're all great companies with great people and great leaders. Yeah, I know all four of the CEOs of those space divisions and companies. They all have good intent. They all have good ideas. It's not that they're somehow different humans than the rest of them, but they're a little bit of a victim of circumstance.
Dylan Taylor (00:32:14):
Part of the challenge is they're trapped, if I can use that word within large defense contractor companies. The model for defense contracting is, has been, hopefully this will change eventually, is more of a cost plus, I hate to call it a jobs program, but it really is that. So, there's a disincentive to disrupt yourself, because if you do that, all you're really doing is lowering your cost structure, and if you're lowering your cost structure, you're lowering your contract value. If you're lowering your contract value, you're lowering your profit margin. It's a very odd way to contract. I think what it leads to is inefficiency. It leads to, in my humble opinion, a lack of innovation, and it leads to not taking a lot of risks. I think this is part of the reason why, you look at ULA, one of the launch providers, that's a joint venture between Boeing and Lockheed, terrific company.
Dylan Taylor (00:33:16):
They've never had a launch failure, Daniel. Never had a launch failure. So it's Six Sigma reliability, $65 million launch cost, or up to $80 million launch cost. But if I'm launching, if I'm Planet, Planet as a upstart constellation satellite company based in San Francisco, their satellites are the size of dorm refrigerators. That's smaller than that, and they cost a couple $100,000 each. Why do they need Six Sigma reliability? They don't, because if the launch fails, that's fine. They'll just build a few more and put it on the next rocket. The point is, I think they've kind of designed themselves into a corner. The reason I say all this is you have companies like Amazon or SpaceX, or Apple or others coming to the industry with just a totally different perspective on how quickly you can iterate, how to innovate, what kind of risk to take, how much capital to deploy.
Dylan Taylor (00:34:16):
It's really shaking things up. I look at Amazon's model. Amazon, there's a reason why that's a trillion dollar market cap company. They are very, very, very smart people. Very smart. I think they have a value chain capture approach. I think it's the way to win the game. I think, if you look at all the strengths that they have, they're playing to all those strengths. I would say they'd be the top of my list. SpaceX, they're a force of nature, as we know, but as much as I admire Elon and SpaceX, they're still a small company in the whole scheme of the world. 4,000 or 5,000 employees. Most of Elan's wealth is paper wealth, unlike Bezos, which is quite a bit richer than anybody out there, and he's pretty liquid or can be, because he has a publicly traded security. I would say Jeff has got deeper pockets, and I wouldn't bet against them, but Elon outworks everybody, and I think he's on the right track with a lot of what he's doing.
Daniel Scrivner (00:35:19):
One thing that I was curious, so you did an incredible job of fleshing out how to think about the industry based on how deep we're going into space. Can you give us a sense for the size of some of the technology players, or some of the new disruptive players in the new space technology area? Obviously what we've talked about most recently is some of the bigger players that they're going to be competing against. Are you seeing like, are there well-scaled private companies that are in the space sector, or is it all sort of an all or nothing game, and it's a bunch of smaller players vying? Can you give us a sense for the range and the scale of some of the players in the space?
Dylan Taylor (00:36:00):
Sure. Yeah, I do think the industry lacks scale. That's the short answer, Daniel, and that's part of the reason why we built Voyager Space Holdings, which we can talk a bit more about. Essentially, what you have, or you have a lot of highly innovative, highly creative companies that are very, very good within a narrow range of capability, but with a lot of supply chain industries, and space is a supply chain industry, it's all about assembling capability. For example, take automotive. If you are the prime, in this case the OEM, if you're Tesla, if you're Ford, if you're GM, you dictate the value chain. Because you're selling the car, you're designing the car, and you ultimately determine buy versus build, and you determine who the supply chain providers are, and you determine who works together within that supply chain.
Dylan Taylor (00:36:55):
You have the lion's share of the economic value because you dictate the supply chain. It's the exact same thing within space. How do you mitigate that? How do you mitigate the fact that the primes, which is the term we use for the companies at the very top of the industry, dictate the value chain? Well, the only way around that is to assemble capability, because the more capability you have, the more robust the missions you can bid on with the end client, which of course would, in many cases, be governments. As you compete and win larger and larger missions and assignments, then you become the mini-prime, if you will, and you make that decision on buy versus build and who you want to subcontract with. The point is you want to move, you want to evolve from a commodity provider to a component provider, to a sub-system provider, to a system provider, to a platform provider, and then ultimately, a mission provider.
Dylan Taylor (00:37:54):
The more you move up on that food chain, the more the value you capture. I'd say that's the next step for the industry. We have a lot of highly capable individual companies, but not a lot of highly capable companies that are, at scale, they have assembled capability. I think this is part of the reason why you see SpaceX morphing into hardware. They don't want to be just a launch provider. First of all, they're intent on going to Mars. Put that at the front burner for now, because everything Elon does, whether it's The Boring Company, or Tesla or Hyperloop, it's all tied to Mars. All of it, everything he does is tied to Mars. But putting that aside, it's about capturing more of the value chain, and that means you need to have a hardware capability, you need to have a data and analytics capability. You need to have a launch capability.
Dylan Taylor (00:38:47):
That's where I see the industry going, is evolving towards more scale, but it's not scale within just a particular silo, it's scale across silos, so that you have more capability and ultimately, can compete for larger and more lucrative contracts. That's really what is driving it.
Daniel Scrivner (00:39:05):
No, that's fascinating, and it makes perfect sense. Starting from that idea, which you just did a great job of setting up, let's transition and talk about what led you to found Voyager Space Holdings and what you're focused on there. I guess, where I want to start is I feel like the last answer you gave is probably some of the insight that you base the decision to go and found Voyager Space Holdings on, but is that true, and were there other things, other trends, other things you saw playing out, and can you both set up what Voyager Space Holdings is and what the mission is? but also give us a little bit of an insight into why you felt like this was the right time and why you felt like it was the moment to try to build one of those vertically integrate players.
Dylan Taylor (00:39:49):
Sure. Yeah, no. I'd love to. Yeah. Again, starting where we began our conversation, I'm in the camp that is super passionate about space as a tool for transformation. What energizes me is getting humans into space. Like Jeff Bezos says, "Millions of people living and working in space." The way my mind works, if that's the end goal, I always think to myself, okay, what are the constraints that are holding us back from achieving that, and what are some of the accelerants that we could add to the mix that would further increase our chance of success for getting there quicker? That's the way I think about it. As we talked about earlier, at one time, the industry was really stuck on this early stage capital formation problem. That's where I really spent a lot of my time.
Dylan Taylor (00:40:40):
I think, for the most part, we've solved that, or gone a long way towards solving that. Where the industry is stuck right now, in my view, is this whole notion of scaling. In order to disrupt, fully disrupt the oligopoly at the top, we're going to need more and more highly capable new space companies that are innovative, that are creative, that are bringing to the industry all these sort of creative forces that have taken us as far as we've already gone. The challenge with that is as you scale these companies, as these companies become bigger and more capable, typically, they become more bureaucratic, they become more calcified, is my new term I like to use, and you ultimately sort of win the battle, but lose the war. You win the battle in the sense that you've achieved scale, but you lose the war because you haven't created anything better than what exists.
Dylan Taylor (00:41:38):
The whole notion is, how do you harness scale? How do you assemble capability and not stifle innovation? That's the problem that we were trying to solve. What we came up with was look, there are so many things within space, or any industry, but in particular space, that scale with size. Capital, of course, that's an obvious one. The bigger you are, the cheaper your cost of capital, but many, many other things, including the client relationship management function. All of these new space companies have clients that include NASA, the Department of Defense, the Air Force, the Space Force. They all have client relationship management functions they need to build. That's expensive. But obviously, if they're all in the same ecosystem, that scales. Public policy scales, having a DC office. Most new space companies might have two hours a month with some outsource provider in DC.
Dylan Taylor (00:42:31):
Lockheed Martin would have 250 people in their DC office. That's a big bridge to gap, but other things like technical areas like engineering and qualification, getting components, space hardened, or tested to make sure they're qualified for space, base engineering for designing some of the components or sub-systems on a particular mission, that all scales with size. All the back office, finance, administration, accounting. Oh, by the way, a lot of these founder-led technical firms, it isn't the highest and best use for these founders who are brilliant, many case, multiple PhD level brilliance for them to be doing back office management or business administration. It's not only not their highest and best use, they get no joy from that either. The whole idea is building world-class Fortune 500 infrastructure that these entrepreneurial new space companies can plug into, all the while acquiring companies, and we're acquiring majority control over these companies.
Dylan Taylor (00:43:37):
So, 51% to 80% of the equity. Why not 100%? Because we want the entrepreneurs to have heavy equity in the business and benefit ... When we double, triple, quadruple the size of the company, we want them to benefit from that, and we also want them to feel like owners and not employees. Leveraging the best of the entrepreneurial spirit, heavy innovation, while scaling all the things back office and front office that scale with size, and screening it for three things, and this is critical. One is a financial screen. We're only buying companies that are post-revenue, post-EBITDA, and post operating cashflow. A lot of people would say, "Well, that's zero companies," and the answer is actually, there are thousands, thousands of companies within the space ecosystem that qualify. Thousands, which is crazy, but it's true.
Dylan Taylor (00:44:29):
Second screen is, what capability are we adding to our ecosystem? If it's a better way to Revit aircraft, I could care less about that, even if it's the most profitable company and this is the best acquisition you've ever seen on paper, it doesn't further our capability, which is ultimately to build a company capable of delivering any mission humans can conceive. What's the capability we're adding? Then the third, which is the most important, as you know, Daniel, being an experienced investor and entrepreneur yourself, is the team. Is it a team that's looking to cash out or is it a team saying, "You know what? We have taken this company as far as we can take it. We want to get to the next level, and we want to be part of something bigger and more ambitious." I guess that would be the final point. I mentioned this to another senior leader within the space industry running one of the larger, more established space companies.
Dylan Taylor (00:45:23):
I said, "The problem with the industry right now is the companies that have the capability don't have the ambition, and the companies that have the ambition don't have the capability, so we're going to create a company that has both."
Daniel Scrivner (00:45:35):
Fascinating. Fascinating. How much of your approach relies on collaboration across the companies and across the teams, and how much of it is more of just an ecosystem approach, where it's a bunch of individual players, you're not necessarily asking or hoping or expecting that they'll work together, but how does that play out, or how does that show up, and what are some of your thoughts there about how that should work?
Dylan Taylor (00:45:58):
Right. Yeah, no great questions. That's really the crux of it, is how do you get independent entrepreneurial, in many cases, very self-confident founders to work together? I think ultimately, space is interesting. I think it is unique compared to other industries. A lot of the founders aren't super motivated by money or other sort of status, symbols of glory. They're more motivated by the interesting elements of the projects they work on. For example, the first company we bought Altius, they're all about what we call on orbit servicing. These are building robotics in space to clean up space debris, or to service other satellites that are already in orbit, whether that's to raise their orbit, deorbit them, refuel them, upgrade them, whatever the case may be.
Dylan Taylor (00:46:47):
That's what they're all about. They're all about that, and the founder, Jon Goff, who went away to college to study engineering, I think at age 14, if I'm not mistaken, so just brilliant, brilliant, brilliant mind, the fact now that he's part of an ecosystem. The second company we bought is all about extracting oxygen from moon soil, and being able to do really creative science on the moon to create resources from existing materials on the moon, to extract those resources so that you don't have to take everything with you on a moon mission. Well, those two companies are already in collaboration. There's a part of that moon mission coming down the pike called the human lander system. The first company Altius has already won that contract. The second company we acquired Pioneer, they've won the contract for what's called ISRU, In-Situ Resource Utilization. Well, those two contracts are linked, because part of what you're going to design the human lander system to is going to be based upon what resources you think are going to be available when you land.
Dylan Taylor (00:47:56):
Part of what you're going to focus ISRU on is going to be based upon what capabilities that human lander system may or may not have. Already you have a contract there that's linked, and already those two entrepreneurs are working together and their teams are working together to make both of those missions even more successful than they would be otherwise. That's just a very simple example, and it's really easy to get people to collaborate when it's right at that overlap between their passion and the capability that their passion opens up for their partner. That's just one simple example, but there are countless others. Imagine, instead of having three portfolio companies or four portfolio companies, you have 15. Imagine all the intersections that can be generated there. Imagine all the contracts you can now bid on where any one company wouldn't have the capability of bidding on it.
Dylan Taylor (00:48:50):
But now you've assembled enough capability that you can bid on some really interesting mission. You're striking at the key issue, which is how do you get people to collaborate and play nice. Within any company, whether you own it or not, or whether they're entrepreneurs or entrepreneurs, that's always the issue. But I think a lot of it has to do with the type of people. That's why I say our most important screen is the team. You don't want any folks on your team that aren't willing to collaborate, or aren't motivated by that level of synergy, but then I think it's also the way you incent people. Again, this goes back to why we would insist that our teams have heavy equity in their businesses, so they benefit from that. It's something that's very challenging, but I also think that's a barrier of entry for us as well.
Dylan Taylor (00:49:36):
I was talking to a close friend, and he said, "Dylan, what you're proposing is very, very difficult to achieve." I said, "I'm counting on that. I'm counting on that. I hope it's difficult, because that means that when we do it, we're going to be that much further ahead of everybody else."
Daniel Scrivner (00:49:52):
No, that's such a great quote. What you're doing is an age old problem, like you said, which it's ultimately, at the end of the day, an incentives alignment problem. It does exist. Whether they're companies that are just in loose orbit, or whether it's a team of companies that has to work really closely together. That makes a ton of sense. It almost sounds like in some ways, what you're building is maybe a modern Xerox Lab, or Xerox Park, and just assembling an incredible group of minds that are really the best of the best in very different spaces, and then teeing up problems where it's a necessity and where they're all going to benefit by working together really, really, really closely. I want to talk a little bit about what you just announced yesterday, which was, I'll try to describe it as best I understand it, and I'd love for you to take it from there and flesh it out a little bit more.
Daniel Scrivner (00:50:42):
But it sounds like, at the end of the day, sort of an intellectual property exchange, where it's an open marketplace where anyone can take IP and put it up for sale, and anyone looking for IP can go and be able to acquire the intellectual property they need. What seems fascinating about it, it seems, at the end of the day, like a lot of the bottlenecks in the space are probably intellectual property related, and that generally, I bet it would benefit all players to have free and open access on equitable terms, where people are getting compensated, but free and equitable access. I'm guessing that given some of what we've talked about, just that the space probably hasn't matured to that level yet. But talk a little bit about what that is, what excited you about that space, and how you were able to kind of spin this marketplace up. Because obviously, it's two sided marketplace, you have to have both demand and supply. I'd love to dive in there and know a little bit more.
Dylan Taylor (00:51:34):
Yeah, sure. It's super exciting. Again, back to this whole notion of how do you facilitate growth of the industry, which is really sort of where we start our thinking, one of the frustrations that I have is the industry lacks standards. There's not a standard satellite size or envelope. There's not standard electronics or a bus system. There's not a standard rocket. There's not a standard, really anything. Right? If you think of yourself as CEO of the industry, just thought experiment, and you think about all the innovation that happens, companies that appear four or five people leave Boeing, start a company, create some great IP. For whatever reason, they can't get enough early stage financing, or they run out of money, they go back to work at Boeing, well, that IP, all that innovation is now under a rock somewhere that no one really knows about.
Dylan Taylor (00:52:30):
Trying to solve for this whole notion of standards, while standards requires a conversation about what the best ideas are, but that presupposes that you know what all those ideas happen to be. So, you got to turn over a lot of rocks in order to determine that. Put that aside for a second. We also have a notoriously bureaucratic IP transfer mechanism within NASA, the DoD, DARPA, you name it. The whole notion was, how do we better understand what IP is available out there? Turn over those rocks and at least shine light, what that IP is. Then once that IP is known, facilitate commerce around that IP, whether it's licensing arrangements or outright purchase and sales, but towards an end game where that end game is, let's have a conversation about what the best ideas are so we can orient as an industry around some of these standards, because standards ... a lack of standards is just, so-called dead weight loss within the economic ecosystem of the industry.
Dylan Taylor (00:53:37):
Everyone loses theoretically with that. Imagine the rail system without a standard gauge. I joke with folks about, imagine pre-COVID, every hotel you go to around the world has a different wifi protocol. Just imagine that world, and that's the world we're in within space. That's the whole notion with the IP exchange, and it's been shocking, the reception it's received, it's really far exceeded our expectations. So, it tells me we have a good idea. I think, from a Voyager standpoint, it's also good to be at the nexus. If we want to position ourselves as the most innovative space company at the forefront of entrepreneurial innovation, having this exchange within our ecosystem, I think obviously serves our purposes as well, but it really was more about, how do we help the industry identify the best ideas and ultimately coalesce around standards
Daniel Scrivner (00:54:35):
Yeah, that makes complete sense. I want to go back to something that you touched on, just the importance in the space that you're in, of having an office in Washington, D.C., and engaging with politicians and people at the highest levels of government there. What I want to explore is, I think when most people think about that, they immediately think of lobbying, or have a negative reaction of like, oh, that's probably ... of course that makes sense that some of the larger players have 250 people in that office, and I bet what they're doing is just working to stifle competition and bolster up their position in the market and make sure that policy gets shaped to suit them. That's clearly not what you're doing. Can you talk a little bit about why that's so important and the way that you think about that and the way that you approach that?
Dylan Taylor (00:55:20):
Yeah. I look at it as one part, client relationship management, for lack of a better word. Who are the clients? The clients are NASA, NOAA. Those would be considered civil space, the Department of Defense, and that's both known budget and what they call black budget, which is the budget that nobody knows about. Within Department of Defense, of course you have striations between Air Force, Army. Now, of course, we have the Space Force, and everything in between. Then, of course, you have commercial space. Commercial space being the phenomenon that's really fastest growing right now. DC is an important market for all those reasons. It's a hot bed of commercial space activity, because a lot of companies are based there. Obviously the DoD is ... all the infrastructure's there, and NASA's based there, etc.
Dylan Taylor (00:56:13):
You definitely need a client relationship management function, but the second really, gets at the heart of the matter, which is, what is it you're trying to advocate for? From our vantage point, it's really more about advocating for opening up commerce. You alluded earlier that the perception might be anti-competitive sort of lobbying. I think that is a strategy in DC. Let's join the country club and then keep everyone else from joining, close the door behind you. I think that is an element. With us, it's the exact opposite. It's more, how do we convince the government that commercial space is a great thing for the country and for the world, and how do we convince the federal government to work with us to facilitate commerce? For example, we worked, years ago, it was four years ago now on the Space Act.
Dylan Taylor (00:57:05):
Space Act sort of opened up and re-imagined space resources, and who could lay claim to space-based resources, and how that ownership would work. Unfortunately, China's not a party to that agreement, so you can argue that an agreement that is US-only doesn't have enough teeth in it. It needs to be more of a UN-level agreement, but notwithstanding that, the whole purpose of that bill was to educate Congress and the courts and others that look, commercial spaces happening, and to have a Cold War era, 1950, '60s treaty governed space commerce, doesn't make a lot of sense. We need to modernize that policy. That's really where we're focused. For example, back to space debris, Altius, one of the companies we own, they've developed this technology that allows you to capture a satellite in orbit.
Dylan Taylor (00:58:03):
It's basically a magnetic lock. If the satellite has this female adapter on its side, the male adapter on the satellite basically will turn on its magnet and it will orient the satellite towards that magnet, and they'll couple, which is a lot more difficult than it sounds because these satellites are often spinning. They're moving at 17,000 miles an hour, like we talked about before, but if you have no way to capture them, then you have no way to deorbit them, or to raise the orbit, or refill them or manipulate them in any way. One of the things that we think is important is that hardware, when it's launched, has some mechanism to allow you to capture the satellite, we think that's important. That will be something that we're going to be advocating for. Other people might advocate for something slightly different than that.
Dylan Taylor (00:58:53):
But I think that's ultimately good for the industry because it's classic tragedy of the commons. You and I could build a constellation tomorrow, put up some satellites, our incremental risk of running into something it's pretty low. But if everyone has that vantage point and everyone puts up satellites, then at the end of the day, you could have a situation where nobody is safe at the end of the day. That those are the kinds of things that we're going to be working towards.
Daniel Scrivner (00:59:18):
Yeah. Clearly, space debris is just on a path, I would imagine, to grow exponentially. That's a problem to start thinking about and get ahead of now.
Dylan Taylor (00:59:25):
Daniel Scrivner (00:59:26):
But I'd love to explore a little bit more, like what are the areas you think are super fascinating? I don't want to give away any secrets, but talk about that in a little bit of a high level way, and then, how have you guys thought about that acquisition process? If you can walk us through some of the steps there, I think it's something people would find fascinating.
Dylan Taylor (00:59:44):
Sure. Yeah, absolutely. In terms of areas that we're interested in, we've touched on a couple of them, but I'll just mention those and expand on a couple, perhaps. One is, we talked about building the elevator. Everything in the last 10 years has been about building a capability to get mass to orbit. The next generation, in my mind, is about manipulating mass in orbit. What do I mean by that? I think part of it is the ability to service or manipulate satellites in orbit, great startup company that I think highly I've called orbit fab. They're too early for Voyager right now to be acquired, because they're in startup mode, but they're building gas stations in space, for lack of a better word.
Dylan Taylor (01:00:27):
Imagine if you could refuel a satellite in space, then not only does it reduce the size of the satellite that you're sending up, because all satellites are set with a lifetime of fuel on board today, but allows you to start thinking about actual infrastructure in space, an actual commerce in space where things are happening in space, as opposed to purpose-built hardware going up and never coming back or never changing once it's up there. The whole on-orbit servicing is a huge area. What that leads to is another area very interested in which is space-based manufacturing, which we could spend a ton of time talking about, but there are some fascinating applications for space-based manufacturing. Imagine, there was a gentleman by the name of Gerry O'Neill, who is a Princeton professor. Who's really seen by many as the godfather of modern new space.
Dylan Taylor (01:01:26):
He inspired Jeff Bezos, he inspired Peter Diamandis. He inspired Rick Tumlinson. Princeton professor. Died a bit too young of leukemia. In fact, the fun fact, the reason Bezos went to Princeton was because Gerry O'Neill was a professor at Princeton. Jeff Bezos's high school valedictorian speech, he talked about how influential Gerry O'Neill was, and the book he wrote called The High Frontier was to his thinking, and he said, I'm going to go make a bunch of money in business, and once I do that, I'm going to implement this book and build a space company. Apparently, that's what he said when he was 17 in his high school valedictorian speech. The reason I mentioned all that is Gerry's vision is, imagine all heavy industry is not on earth. Imagine all heavy industry is in space, it's in free space, and the earth is like a national park, if you will, it's an oasis.
Dylan Taylor (01:02:22):
That's a pretty cool vision, whether that's practical or not anytime soon, who knows, but so space-based manufacturing captures the imagination. I think there's some real teeth with that now in terms of capability. The other one I really like, Daniel, is space-based energy. There's unlimited energy in space. The sun's right there. There's no atmosphere. Solar works really, really, really well. So, it's all a matter of distributing power in space. There are models that would allow you to actually send energy back from space to earth, whether it's via laser or via microwaves. It's certainly within space, or distributing power to the moon, for example. That's all technically feasible. Very, very interested in those models as well. Then, on the earth observation side, so these are all the constellations going up, climate change and weather. That's really where we're very focused right now.
Dylan Taylor (01:03:17):
Super interesting. I think our climate science is very mediocre, and it's not for lack of trying, it's really because that climate data hasn't been privatized or commercialized. We're now seeing the advent of a lot of commercial weather satellite companies. That means the data is going to be better. With better data, you get better models, and with better models, you get better recommendations. We're super excited about that. On the diligence process, just briefly on that, first of all, it's very difficult in COVID times, obviously, you can't do a lot of the things that you would do in a normal world, getting all the teams together in the same room for an extended period of time. But we're really diligencing heavily the tech. If we don't understand it, we're not going to buy it. Understanding, is there a moat around the tech or is there ...
Dylan Taylor (01:04:10):
If there's not a moat around it, is there enough of a headstart that you can innovate your way into a moat? Then ultimately, what does the team look like? Is that team actually capable of taking product version 2.0 to 3.0, or 4.0? Do they have the imagination? Do they have the technical capability to iterate? Because as Elon has said, at least I heard him say recently. I think Bezos has said this too. Focus exclusively on the product. At the end of the day, the product is what really matters, because that's what's going to drive value. In space, that is very much the case. Without a product that's technically viable and differentiated from what else is out there, it's very difficult for salesmanship to win the day. Because it's just that stakes are too high, so you really need to focus on the product. So, we spend a lot of time at technical due diligence.
Daniel Scrivner (01:05:09):
Nom, that's super interesting. It sounds like part of what you're likely underwriting is, since you're focused on companies that have hit some really significant milestones. Clearly, they've solved the zero to one problem of taking something from an idea to taking something to something that has initial traction, where the economics are starting to work, and then you are making a bet there, that they can take it and scale it. Part of that underwriting sounds like you're looking at teams that have solved that zero to one problem and making sure that they can be in it for the long haul, and they can take this and ... I refer to that sometimes, in the best term that I've come up with, as just trying to create a team and try to find team that can do repeatably excellent work, where I think it's relatively easy once you have enough experience, due diligencing companies, or in some of the work I've done previously, where you're working with design and product and engineering teams.
Daniel Scrivner (01:06:01):
I think you find out in time that it's relatively easy to kind of strike gold once in a while, and it's very, very, very difficult to be able to do that in a reliable, consistent, and really exceptional way. That's fascinating. Clearly, a lot of the customers for space technology, and it sounds like where we are seeing a boom, where their people are realizing, people are building, people are seeing the commercial and capitalistic potential of space. But obviously, the other big thing that's going on, which is a little bit under the surface is that countries around the world, and obviously the US, especially with Space Force, are focusing on space, both for defensive and offensive capabilities. What is interesting there, what scares you there, and how do you think about how you want to engage there on whether it's with the defense sector or whether it's with private, more capital kind of focused company?
Dylan Taylor (01:06:56):
Right. Well, that's a great question. Given our conversation earlier, I think it won't be a surprise that I'm more from the camp that says space is a uniter, not a divider. That space allows humans to be aware of the fact that we have 99.999999% in common, and we tuffle or tussle over the minor differences. I'm definitely from that camp. That being said, there are certain practicalities in the world, and one of which is you've got the rise of China and you have essentially a new Cold War emerging between China and the US, and there's going to be backers of the US model, and there's going to be backers of the Chinese model. That ship has sailed, in my view, and it's a very real issue. We have now hypersonics and offensive capabilities in a space, where someone theoretically could take out the GPS constellation, as an example, which would be devastating to global commerce.
Dylan Taylor (01:07:57):
There are some very real threats out there. China's space capability has shocked me, Daniel. I'm rarely shocked by anything in space, but if I look at how far they've come in five years, I'm astonished. I'm astonished. They're going to do the most ambitious Mars mission ever done. What they just launched here in July now, whether they pull it off or not, we'll see, but they're doing a orbiter, a lander and a rover all combined in one mission, which has never been done before. The point is their capability is very strong. I'd still put them probably fourth behind the US, ISA, and Japan, but that's coming from NOAA, essentially. I think there are very real issues around militarization of space. I have some friends that I admire within the space industry that are more philosophers, and we founded a space philosophy site where people can kind of post content that I wrote a small piece for that.
Dylan Taylor (01:08:59):
The question I posed was, or the question I guess I asked was, space will be defined by what happens first. The first human born in space, or the first combat fatality in space. I think that's the way I frame it. What's our destiny? One of those two things will happen first, which one's it going to be? I think, like I said, there are practicalities, US and China are going to be at conflict, with or without space. It's unrealistic. I think to assume that that conflict will only happen on terra firma and not in space. I think we are headed for a future where there is going to be space-based conflict, but I just hope that doesn't define what space is about. If I could shape anything, it would be to really keep space more as a canvas that we can paint our future on, and not just a copy paste of what we currently have.
Daniel Scrivner (01:09:58):
Yeah. I love that. Going full circle to what you started out the conversation with. As we've talked about this giant boom and optimism, interest and excitement around space. For people who are listening, who are similarly fascinated by space, what are some books or talks, what are some that you think of as are maybe from a few decades ago that are this kind of, I don't know, just vivid, optimistic and exciting picture of what space can become, and what are some more recent things that you've been reading and that have captured your attention in the space?
Dylan Taylor (01:10:33):
Yeah, no, for sure. I think in terms of kind of how we got to where we are, I mentioned Gerard K. O'Neill before, so-called Gerry O'Neill. He wrote a book called The High Frontier. I'd highly recommend picking that up. If you have a real interest in sort of settlement and infrastructure in space, he really wrote the book on that. There is going to be a movie coming out on his life released this fall, to either Netflix or Amazon, so I would definitely watch that. I think people will be fascinated. Bezos is in that movie, so is Elon. I think that's worth watching. In terms of sites out there, there are a lot of organizations that I think people could get plugged into, National Space Society. That's the one led by Bill Nye. That's very interesting.
Dylan Taylor (01:11:18):
I founded one called Space for Humanity, which is, I think probably second only to Space Society in membership now. That's worth checking out. That's all about democratizing space. The thing I like about Space for Humanity is they cover all the major launches with livestreams, so that could be interesting to folks. There are some really good books coming out that are really about the space race. The lead reporter, Christian Davenport at the Washington Post wrote a book called space barons, which is about sort of the advent of the billionaire rocket club, if you will. That's worth reading. A good friend of mine, Robert Jacobson has written a book called Space is Open for Business, which I was a pre-reader for. That's coming out in a couple of weeks. I'd recommend that. I think those are some of the highlights, but there are several sort of notable space figures that have either personal websites or blog on these topics.
Dylan Taylor (01:12:16):
Certainly, if they come to my personal website, and put in a request, I can point them in the right direction. Typically, space is one of those industries where everyone's sort of one degree of separation away. If I can be helpful to anybody in terms of getting connected in the industry, I'd be very happy to do that.
Daniel Scrivner (01:12:33):
Oh, that's wonderful. We'll share all the ways that people could find you. I was just going to share one book that ... I'm curious, you talked about obviously at an early age being really captivated by Star Trek and part of space that I find fascinating. I think the way a lot of people get connected to it initially is more through science fiction and the stories that happen in space. There was a book I read recently, I read it last year, and I admittedly don't read much fiction. I'm trying to improve in that area. But this book, I just thought was fascinating. It covers quantum technology and how that can play out in the future. It covers what the space race could look like, say 10 years from now, between the US and China. It's a book called Red Moon, and it's written by Kim Stanley Robinson.
Daniel Scrivner (01:13:18):
I listened to it on audible. The audible version of it's incredible. Do you have any similar, just like stories, that you love that are more based in space? So, it's obviously going to be probably more fiction, less nonfiction, but do you have anything there that you found really?
Dylan Taylor (01:13:33):
Yeah, I have to pick up Red Moon. That sounds great. There's a lot of classics out there. If you haven't read The Foundation Series by Isaac Asimov, highly, highly, highly recommend that. I think anything by Robert Heinlein is sort of top of mind with space aficionados as well. Then Arthur C. Clarke, that's really the trifecta or the holy trinity, if you will, of science fiction. I'd recommend anything by any of those authors. Those really, I think, capture the imagination around the space industry and sort of what might be possible. All that being said, just there's some great books by astronauts. I mentioned earlier, Frank White, who wrote The Overview Effect, highly recommend that. That's more of a case study the psychology of space, but there are several astronauts, Ron Garan is one of my favorites, who's written a book called The Orbital Perspective. Again, about this transformation.
Dylan Taylor (01:14:29):
Scott Parazynski, who's on the board of Voyager, wrote a great book about sort of the innovative nature of being an astronaut and how they see the world. There are some great, what I would call handbooks, if you will, for why space is important, why it matters and how it transforms people that I would also recommend.
Daniel Scrivner (01:14:49):
For anyone that's listening that wants to get in touch with you, what are all the places you would send them to, where they can follow along with what you're interested in and what you're exploring, or places where they could connect with you and reach out if they have an opportunity or they think there's some sort of a fit there?
Dylan Taylor (01:15:05):
Yeah, sure. I think probably the best place to go would be my personal website, which is dylantaylor.org. They can drop me a note on there. There's an information request, and it has links to pretty much everything I'm involved in. I think ultimately, that's probably the best gateway. Then certainly, I'm active on Twitter and Instagram, primarily, and also LinkedIn, so they can find me there, if that's easier for them. But I would say the best place is Dylan taylor.org.
Daniel Scrivner (01:15:34):
Where can people go to find out more about Voyager Space Holdings?
Dylan Taylor (01:15:37):
Sure. The website is voyagerspaceholdings.com. There's also a link on my personal website to that, but that's our gateway. Certainly, we have, once you're on that site, if you want to be part of our newsletter or distribution list, happy to plug you into that as well. We're making pretty frequent announcements, just because we have so much activity and anticipate announcing another acquisition here pretty soon as well. So, very happy to add people to the list there.
Daniel Scrivner (01:16:06):
That's exciting. One parting question, and I'm going to try to steal this, but maybe do it in a little bit of an interesting way. Yeah, maybe to share a little bit of my story. I went to Space Camp when I was young, and I was similarly enraptured by space. For a period of time, I really wanted to be an astronaut, and as I got older, that dream didn't quite seem like the path I wanted to pursue. But for people who are young that are super interested in space, what would you share, what would you ask of them, what would you tell them that were your hopes and your dreams for where space can go?
Dylan Taylor (01:16:40):
Oh yeah. Well, look, I think, first of all, no matter what your skillset is or what your fundamental ambition is for a vocation, gone are the days in view where you have to be 6'2" white male fighter pilot to go to space. That's totally changed. It's already changed, and it's going to be further disrupted. Space is going to need artists, space is going to need every background you can think of. We're going to open up space tourism probably later this year, or early 2021. It will be an everyday occurrence that you're going to know somebody who's been to space here, in two or three years. As that price point gets lower and lower, and we build more infrastructure in space, more and more people will have the opportunity to go. I would say, you can have your cake and eat it too.
Dylan Taylor (01:17:30):
You don't have to study a technical subject, if that's not something you're super interested in. You can be passionate about space and study art. You can be passionate about space and take a non-traditional path to living and working in space. I would say, just get plugged in, make sure that you're aware of what the happenings are. Find a mentor. I'm a huge believer, Daniel, in mentorship. Obviously, I can't personally mentor everybody, but if you reach out to me, I'll try to guide you in the right direction, at least in terms of identifying somebody. But I think that's critically important, is to find someone within the industry that can take you under their wing and show you the ropes and get you introduced and plugged in, as I did. Eric Anderson served that function for me.
Dylan Taylor (01:18:16):
I think it's really important to approach it that way. But I think the general theme I want to make is, space will not be a domain that's separate and distinct from society. It will be society. I tell people, everyone's in the space industry, they just don't know it yet. If you're passionate about it, get really good at whatever your skillset is or whatever you have ambition for, and then figure out a way to plug that in to what's happening in space. That would be my recommendation.
Daniel Scrivner (01:18:46):
That's incredible advice. Dylan, we've covered so much. This has just been an incredible for me to get to sit here and listen to this whole interview, so thank you so much for the time.
Dylan Taylor (01:18:56):
Daniel Scrivner (01:18:56):
Thank you so much for being so open and generous about everything that you've studied and learned about the space, and this has been a real treat.
Dylan Taylor (01:19:03):
My pleasure, Daniel. Thank you. It's been an honor.
Daniel Scrivner (01:19:09):
Until next time, thank you so much for tuning in. For show notes, including links to anything and everything mentioned in this episode, please go to outliers.fm. If you enjoyed this episode, sign up for my weekly newsletter. You'll be the first to hear about new episodes before they're released and you'll get the best quotes, themes and ideas from each episode in a weekly update I call Inside the Episode. To sign up for that, just go to outliers.fm/newsletter. Just two more things before you take off. Number one, if you enjoyed this episode, please leave a review in iTunes. My amazing team and I invest countless hours planning, researching, and editing each episode, because we want all of them to be amazing. We hope you enjoyed listening. If you did, please consider taking 30 seconds to leave a short review in Apple Podcasts or iTunes. Reviews are crucial in helping us get the best guests and helping more people find Outliers.
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