A new industry offers risk, excitement, and the potential for big rewards. That’s why more than $7.7 billion was invested into the Space Industry in 2020 alone, according to NSR’s Emerging Space Investment Analysis, 3rd Edition report (ESIA3). Bank of America expects the space industry to reach a $1.4 trillion market within a decade. Now, many entrepreneurs are wondering what it takes to succeed in this new era of space exploration.
Dr. Matthew H. Hersch J.D., Associate Professor of History of Science at Harvard, gave a talk at NASA’s “The Rise of Commercial Space: A Symposium to Examine the Meaning(s) and Context(s) of Commercial Space” in March 2021. He highlighted four important lessons for new private companies to take into consideration when entering this sector.
1. Don't Invent Your Market
There are many great ideas out there, but there are reasons why not all of them succeed. If your company has invented a new product that no one is asking for, don’t assume that the market will develop once you spend your initial investment. More than likely, it will become a sunk cost, as no one needs it. Make sure that your invention is solving a real problem that already exists and people are asking for the solution you’re building.
2. Work With Government
Rocketry and space travel are expensive industries. The government is able to absorb costs and take risks that the private industry cannot. It can subsidize Research & Development, infrastructure, and the development of a skilled workforce. In the New Space economy, it is also the customers with the deepest pockets who are able to finance their goals. Government organizations are starting to take a step back from development and are becoming customers for the private sector. The new space race is about who can meet the government’s needs more reliably, and at the lowest cost.
3. First Movers Fail
Great inventions don’t always turn a profit. Even when the idea is well-thought-out, there’s a demand, and there is enough money to get it off the ground, a second mover may still come out on top. That’s because the companies that come after the initial experiment will be able to learn from their predecessors' mistakes, and find ways to improve on the original solution. Companies must continue to innovate, strengthen their brand, or re-brand when necessary.
4. Don’t Invent - Augment
Reusing and repurposing designs, parts, and launch vehicles that have a proven track record can significantly improve your chances of success. Innovation and invention are not synonymous. Since the government doesn’t need to have profit in mind, it can dream big and experiment. But the space business is built on reducing costs, even if it’s at the expense of novelty and excellence.
Space can be an intimidating industry to enter. Yet when you’re involved in changing the trajectory of the human experience, it’s definitely worth it. There are many problems to solve, and innovation is highly sought-after in this sector. That’s why Lunargistics is here to make the process easier. Our products guide you through pre-launch, focusing on compliance and funding so you’re ready for liftoff. Contact us at firstname.lastname@example.org