Trip Report: NewSpace 2012

[Okay, I'm late with this, but the information won't go away just because I'm a week or two late reporting it. Major caveat: These opinions are my own, and do not reflect those of NASA, my employer, or any other organization.]

The NewSpace Conference began as the annual gathering of citizen advocates of the Space Frontier Foundation (SFF), but also has become a place where investors, entrepreneurs, and technologists go looking to start businesses. How does this differ from the International Space Development Conference (ISDC), which I've attended numerous times and chaired last year? As Inigo Montoya might say, "Allow me to 'splain."

Politically, SFF is the major libertarian space organization, so the conference very much focuses on free-market approaches to space development. The National Space Society, which hosts ISDC, is more of a middle-of-the-road, Democrat/Republican organization. NSS isn't entirely focused on private sector development of space; they also support government (meaning NASA) driven activities. NSS is more of a "big tent," interested in multiple technologies and approaches to space. This difference in philosophy is likewise reflected in the formats of the two conferences. With so many diverse interests involved, the ISDC is often broken into multiple tracks and, as a result, multiple rooms. With NewSpace, the conference has essentially one focus, and its sessions are held in one room. Not saying one's better than the other, just observing a difference.

And, to repeat, NewSpace is all about using the free market to get human beings to settle the solar system. In recent years, that message is getting a larger audience. One SFF member told me that attendance has grown from around 75 to 450 in only a few years.

Philosophy
Given the free-market focus, one might presume that the audience is treated to a long series of Ayn Rand lectures. In fact, I can't recall Rand's name being invoked once, or any other philosopher for that matter. Individuals espoused philosophies, but they were their own or existing philosophies expressed their own way. Free-market principles have gone native.

Economic Development
NewSpace 2012 is held in Silicon Valley, the community of high-tech companies inhabiting the southern end of San Francisco Bay. Since the 1970s, the area has been an incubator for bright engineering ideas, from silicon chip-based integrated circuits to personal computers and mass-produced software (you might have heard of Steve Jobs). The area is also known for its aggressive venture capital market--the investors go where the money is, and the money is very much in technology. Today it is home to Apple, Google, Intel, and other high-tech giants, not to mention NASA Ames Research Center.

In the last ten years, some folks who got rich developing software, hardware, or web applications have put their money into space. What's happening now is that others are starting to get into the game, and the Space Frontier Foundation is making efforts to help that along by leading a space business plan competition, which awards prizes to space-based or space-related businesses. The rules can be found here, but the biggest draw for the 55 competitors was that the first-place winner received $100,000 and the second-place winner won $10,000. Much of the Friday session was taken up by the presentations and Q&A by the judges. The winners were announced at the gala on Friday.

Again, the SFF's focus on free-market solutions to space allows it to concentrate on this type of competition.

Working Out the Roles of Government and the Private Sector
Given all the rugged individualism and focus on the private sector, it might surprise you (as it did me) how many government officials attended NewSpace, especially from NASA. This is because the Obama administration has continued the Bush administration's policy of encouraging private companies to launch cargo and crew members to the International Space Station. Not only that, the Federal Aviation Administration has had a keen interest in expanding the licensing of commercial launches as well as suborbital launches to the edge of space. (Lest you think the libertarians are warming to government, I heard at least one person say that the government's primary interest in supporting all this activity is to grow the tax base and avoid the high cost of NASA.)

The businessfolk in the room were interested in government performing the following roles:

• Sharer of new technologies: Nearly all of the basic research and development for space technology was developed by military officers or government civil servants (Werhner von Braun was Director of Marshall Space Flight Center, not a contractor). NASA and its predecessor organization NACA have done a lot of the original R&D, discovered basic principles of a science or technology, and then once they proved them out, made it available to the American public or the private sector to exploit for mass production. This practice goes back nearly 100 years, as NACA was formed in 1915. NASA is still doing research, and the session given by James Reuther, Acting Director of the agency's "game-changing" technology program was well attended.
• Purchaser of products and services: Aside from basic R&D, government doesn't produce a whole lot. Farms, construction materials, cars, trucks, airplanes, trains, processed foods, computers, and millions of other small products are built by individuals or companies in the private sector. It's even written into many government procurement laws that if an equivalent product or service already exists to perform a certain task and that product or service costs less than what the government could do it for, the agency in question has to purchase the private product/service first. Such is the logic behind the NASA Commercial Orbital Transportation Services (COTS) program and its follow-ons CCDev and CCICap. More on that later.
• Early adopter of new technologies: Sometimes NASA, Department of Defense (DoD), or other government agencies will mandate that new technologies be incorporated into test programs. This provides economic development and "pushes the envelope" of what current technologies can do. Government might win by getting something cool at a low cost, the company wins by having a guaranteed buyer. There was quite a bit of talk about "public-private partnerships" as well.
• Builder of infrastructure: There are things government can do more effectively or willingly than the private sector simply because there's no profit in it. Airports come to mind, along with seaports or (once upon a time) power systems, canals, or air traffic control systems. Another form of "infrastructure" would be legal regimes, regulations, and standardized "rules of the road" for conducting business. For example, NASA and the FAA reached an agreement on how commercial space-launch services would be certified for passenger safety. Businesses prefer consistency in the rule of law so that they know what it will cost to comply with government regulations. The NASA/FAA agreement was welcome, but many in the audience were concerned that the specific rules for passenger safety had not yet been nailed down. Stay tuned.

What was refreshing was to hear the rational debates that were being held about the proper role(s) of government in the private sector.

Where the Technology's Going
It's hard to overlook the rockets--we don't get to space without them--or the people who are building them: Elon Musk, David Masten, John Carmack, etc. However, rockets are expensive, especially if you want to build them so that they carry enough mass into space to do something useful and so that they don't explode. So if you're smart, you don't get into the rocket-building business. As I said, it's expensive. It's also complex--rocket science, after all--and requires a lot of industrial capability that is not easy to build or acquire. However, that is not what the people competing in the Space Business Plan Competition were doing. They were looking for ways to play in space for considerably fewer dollars.

For example, the presentations I watched focused on nano-scale materials to increase germ resistance on surfaces inside space habitats; a "smart propellant" for satellite thrusters that would only activate when a current is passed through it; and a crowd-sourced "cube sat" (satellites 10 centimeters to a side), which was a project Science Cheerleader and I supported.

In each of these cases, the competitors were not aiming to build a big, friggin' rocket, space station, or anything like that. Their goal was to specialize in some tiny part of the market that had the potential for massive growth. Materials are everywhere. Cube sats are becoming more common as "Moore's Law" continues to double the number of transistors per computer every 18 months. The aim, as with everything in Silicon Valley, is to develop the "killer app," that one really cool and useful technology that suddenly everyone must have. Consider Facebook, or YouTube for example.

Throughout the "NewSpace" sector, entrepreneurs are hoping to recreate this industry in the Silicon Valley image so that, eventually, more and more private citizens have access to space. This is still not as easy as some would prefer. The rocket equation is a lot more resistant to technological advances than Moore's Law because most computers are not trying to accelerate to Mach 25 before entering an environment with high radiation, no gravity, and no air. Still, the true believers are hopeful, as am I, that some genius will produce that killer app or apps that enables rockets to be as common as laptop computers. I'm not holding my breath, mind you, but I can hope.

Space Launch System
I'm going to keep my remarks short on this, but at one point, I was faced with a PowerPoint slide that read, "SLS Delenda Est: The Senate Launch System [sic] must be destroyed." Obviously I've got some hard work ahead of me in my day job.

The Big Picture/Vision
As I noted earlier, the Space Frontier Foundation is interested primarily in free individuals settling throughout the solar system under a regime of personal freedoms and laissez-faire capitalism. Other individuals speaking in the "visionary" sessions focused on the future we're likely to face with ever-advancing computers, nanotechnology, biotechnology, and robotics--the Singularity, or something approaching it. As Arthur C. Clarke once put it, "Any sufficiently advanced technology is indistinguishable from magic." At the rate technology is advancing, all I can say is prepare to be astounded.

Listening to the talk at the conference, the future would seem to belong to the smart, the rich, and the tech-savvy--the smart people's 1 percent, if you will. That's great if you fit into one of those categories. The question I asked during the last session was and is: "What do you do with those who are none of the above?" I didn't get a satisfactory answer from anybody on the panel. Perhaps they didn't see my intent, but there are folks out there who are unknowingly or willfully uneducated--whose jobs will increasingly be replaced by ever-smarter machines. What's to become of them? The number of niches being filled by advanced technology will continue to increase. If you can't afford all the cool toys or your culture or religion forbids them, how do you coexist with "magic?" I have no answers, either, but that's a conversation that needs to be had as we continue our quest to send people to live beyond Earth.

Summary
NewSpace was enjoyable because I had a lot of friends there and because there were a lot of interesting things going on. There's a real future being made in the entrepreneurial sector of space. How it all unfolds, only time will tell.

Book Review: Escape from Cubicle Nation

I found this book via an actual friend (as in, know him in person, not just electronically) on Twitter, and I was intrigued by its punchy title. Escape from Cubicle Nation is written by Pamela Slim, an energetic "escapee" from corporate America who became a consultant for big businesses in Silicon Valley before turning her attention toward teaching individuals how to become entrepreneurs like her. And she's not fooling around: this book is definitely for people who are ready to strike out bravely on their own and turn their lifelong dreams into profitable businesses. If you're not up to it, she wisely advises her readers to stay where you are. It's not so much that starting your own business isn't for the timid, though that is certainly true; but Slim makes it clear that when corporate America turns on you in some fashion or starts to make your life miserable, "Hating your job intensely is not a business plan."

As it happens, I'm more of a corporate type than an entrepreneur. For the most part, I like working for large organizations and letting other, more interested people handle the bookkeeping, lawyering, insurance, and other stuff that doesn't fall under the realm of "communications." But all is not lost, according to Slim. More on that in a moment.

What won me over with this book was the author's "Open Letter to CXO's [chief executive officers] Across the Corporate World," which was her manifesto for why she decided to "take your best, your brightest, most creative, hard-working and passionate employees and sneak them out the hallways of your large corporation so that they are free of the yoke of lethargy, oppression, and resentment." What follows is a series of suggestions for how to make drastic (but unlikely) changes in American corporate culture, such as "Teach people how to get rich like you," "Don't ask for your employees' input if you are not going to listen to it," "Ditch the PowerPoint when yoiu have town hall meetings," "Focus on the work people do, not how or when they do it," and my favorite guffaw, "Forbid people to work while they are on vacation." Those might be fun changes to see...at some point.

Something became clear to me about one third of the way through the book: Slim's advice applies to a very specific, though admittedly large, segment of the American workforce: white-collar workers working in positions with high technical skills. Some jobs just aren't exportable. The first example that popped into my head was a line assembly worker at GM or Boeing, which is a job you really can't just pick up and do anywhere in the world, like a couple of her examples of successful entrepreneurs. You need to go where the work is. Of course those folks could start up their own machine shop, perhaps, but that involves investments in heavy equipment that isn't very portable or transferrable.

I don't say this to be critical, but Slim's emphasis on portability will not always resonate with people who want to open their own flower shop or set up some sort of business that requires a physical inventory. The choir she's preaching to is mostly folks who use their brains and computers to get their jobs done. The reason this emphasis is unfortunate is that her readership could have been broader if she'd focused on just starting one's own business. A lot of her advice does apply to any type of business, as she addresses all the practical concerns a potential entrepreneur needs to consider before starting. However, some of her advice, references, or analogies might fall on deaf ears because not everyone is operating in a corporate office environment.

All that said, the rest of the book rings true for me, and the author moves along briskly (as opposed to the science fiction book I've been slogging through on my Kindle for months, I got through Escape from Cubicle Nation in about a week). She covers not just the practical concerns of running a business, but also the social aspects of entrepreneurship, including overcoming doubters among your friends and resistance from your significant other, especially if you've enjoyed a great deal of success and stability in your corporate life. I appreciated her balance of encouragement and "reality checks" throughout the book. The bottom line for Slim, as you might suspect, is that you have to keep your eye on the ball and love what you're doing, or you'll crash and burn. More importantly, if you do crash and burn, you have to be willing to get back up again and work your backup plan(s).

So after reading this book, am I ready to jump out on my own? Actually, no. Escape from Cubicle Nation is not something I'm eagerly craving at this point in my life, and I'm honest enough with myself to know that I don't want to do all the paperwork entailed in running my own business. Plus--and this is probably most important--I don't have a specific thing that so sets me on fire that I think I can only do it well by starting my own business. At some point, maybe. In which case, I will return to this book, and reread its lessons, because Pamela Slim has all the bases covered.

Middlemen in Space

This blog was inspired by a couple of sources: the recent Heinlein New Space Business Plan Competition, which I did not enter because I had too many other things on my plate, and Thomas Sowell's Basic Economics, which I am now reading to educate myself on economic reality.

It occurred to me early on in my quest to get into the space business that I would not become an astronaut, space scientist, engineer, or rocket- or space station-building entrepreneur. Such careers are either not of interest to me or within the range of my financial capabilities. However, there is much to be said of middlemen--those scourges that Douglas Adams describes as "an entire useless third of the population," as opposed to the great thinkers or the workers who "actually did things."

In The Hitchhiker's Guide to the Galaxy radio program, Adams described an alien planet which concocted a story that their planet would shortly be destroyed in a great catastrophe. The useless third of the population (consisting of hairdressers, tired TV producers, insurance salesmen, personnel officers, security guards, management consultants, telephone sanitizers and the like) were packed into the "B Ark," one of three giant Ark spaceships, and told that everyone else would follow shortly in the other two. The other two thirds of the population, of course, did not follow and "led full, rich and happy lives until they were all suddenly wiped out by a virulent disease contracted from a dirty telephone."

Adams' take on middlemen notwithstanding, most of America's small businesses are based on jobs that qualify more as middlemen. The economic argument runs something like this: large companies have the resources to do lots of things, like build large finished products, manage their own public relations, and so forth, but eventually economies of scale cause them to become inefficient at particular activities. It is in these small niches, like transportation, package delivery, paper shuffling, sub-component manufacturing, brochure design and printing, etc., that individuals and small companies can find ways to do things more cheaply, start their own business, and save the larger companies money than they would spend doing minor tasks themselves.

Tim Pickens, President of Orion Propulsion, stated this position to me early on in his company's existence: "I don't want to build the Transcontinental Railroad, I want to be the guy selling pickaxes to the workers." He understood what I think many big dreamers in the entrepreneurial space business often miss: the real money is to be made at the second- and third-tier supplier level, not at the level of building America's Next Great Rocket Ship.

Elon Musk's SpaceX does what's called "vertical integration" of his business, in that he is building nearly every part of his rocket in-house from start to finish because he cannot find the suppliers he needs to build the specialized components he wants, and it is not cost-effective for the big aerospace firms to build them in the small lots SpaceX needs. Until the second- and third-tier suppliers come along to support the specialized widgets and services New Space companies need to make their rockets go, vertical integration efforts like Musk's will continue.

Now Pickens happens to be a maker of widgets--he's not necessarily building entire launch vehicles (though he does those, too), but he is developing new engines, new technologies, and new ways of doing things on the margins that the bigger companies don't always have the time or money to do. He's starting to build thrusters for Bigelow Aerospace's much bigger project, the Sundancer inflatable space station.

So what would I do, English major and mid-tier bureaucrat that I am, if I was sufficiently motivated or capitalized? Here are some of the niches where I could start a relatively successful business:

• Communication, marketing, public relations, and branding services.
• Business and marketing plan development for startups.
• Federal regulatory compliance -- helping smaller aerospace companies complete and obtain the legal permits to do things that occasionally go boom, e.g., FAA flight approvals, environmental impact statements, etc. This would obviously require a few lawyers on staff.
• Market research - seeking out "spinoff" uses and customers for new aerospace technologies
• Developing aerospace-related education products for educators.
• General administrative staffing to handle any or all of the above.
• Concession services at spaceports, once they're finally open for business--think of all those businesses in commercial airports--food & beverage, retail, parking, business centers, etc.

Other small businesses are possible, of course, but this is mostly an intellectual exercise at this point because I'm happy where I am. Still, if the American economic engine is allowed to function normally again, I will not be the only one to think of ways to make money in the new space economy. The saying used to be, "If you can build a better mousetrap, the world will beat a path to your door." Let's hope that continues.