five [Applause] four three two one zero all engine runner liftoff hey space enthusiasts my guest this week is the ceo and founder of phantomspace jim cantrell having started at jpl jim is also a decades-long veteran of commercial space he has been involved in around a dozen space startups including at spacex in its early days there are probably few people who have been around the commercial space sector as much as he has so predictably we don't only talk about phantom but about the space economy in general enjoy my name is raphael rodkin and i'm an investor in advisor to space companies just as a reminder this podcast is for informational purposes only and nothing should be taken as investment advice this podcast is sponsored by nano avionics a satellite manufacturer and mission integrator their technologies enable many space companies worldwide to offer services that improve life right here on earth such as providing global connectivity conducting earth observation or contributing to scientific discoveries check them out and also check out my episode with the ceo and co-founder sadly i am not a rocket scientist but i'm an alumnus of the international space university isu offers a number of educational programs about space worldwide check them out at isunet.edu [Music] and just some final things before we start the episode about ourselves if you enjoyed a podcast please leave us a five star rating on your favorite podcast platform such as apple or spotify if you want us help expand our work you can do so and support us at www.patreon.com forward slash space business podcast and we'll also put that link in the episode notes and lastly you can follow us on twitter at podcast underscore space welcome back space enthusiasts it's another exciting episode of the space business podcast i'm thrilled to be joined today by somebody who's really spent a lot of time in the space sector in various worlds including his most recent role at phantom space which i'm sure we're going to talk a lot about welcome jim cantrell uh yeah glad to be here thanks for having me and and jim as i implied you have spent a lot of time in space in various roles so typically we start these episodes you know by asking you to give an elevator pitch on your current company which is phantom space where you're the ceo and the founder but if that's fine with you and i promise you we'll spend ample time on phantom space but if it's fine with you could be back up and maybe just go through your history how you got into the space sector and then maybe chronologically touch on a few of the projects you've been involved in yeah no problem yeah so the only thing i've really known i wanted to do for sure in life since i was a kid was race cars so i ended up going to university in mechanical engineering and i got rid off into space early on because of a nasa sponsored design course back in the 1980s and i signed up for it and it was it turned out to be a contest among various universities in the united states and uh i was a top finisher and i got a uh internship at the jet propulsion lab back in uh 1986. so that put me in in the same offices as a lot of these guys who did the apollo era programs you know the lunar programs the mars program these were walking giants as far as i was concerned so i became a bit of a space geek very early sort of accidentally and that led to my first job in toulouse france at uh the french space agency working on a joint soviet french mission to mars uh called mars 92 at the time spent a number of years working there until the soviet union fell apart and uh came back to the united states people treated me like i was a traitor because i'd worked for both the french and the soviets and uh that wasn't something you did back then and i ended up getting recruited by the intelligence agencies through the university i'd gone to help stop brain drain in the former soviet union and the space business so spent another six or seven years in russia helping to convert icbms to satellite launchers and do joint programs with them and uh that that kind of led to a lot of a lot of very interesting commercial work the planetary society had been involved with me since my days at jpl and they were trying back in the day to get the soviets and the americans to work closer together and that effort really continued and lou friedman who i was one of the founders and the executive director had this idea of launching a solar sail commercially uh out of a russian submarine so we did that in about 2000 so we converted a ssn 18 from a russian submarine to a satellite launcher and launched a purpose-built uh solar cell it didn't make it to orbit turned out the the rocket blew up when the second stage ignited but it was an interesting experience and that led to elon musk calling me out of the blue in 2001 looking to have helped find russian rockets for a mission to mars which you wanted to do right and uh that what is now famous story led us back over there a couple of times and when the russians were acting more or less like they're acting today elon decided to build the rocket himself and that started spacex so i was there for a while left spacex after a few years elon and i couldn't really co-exist in the same room we're both i guess alpha males with our own ideas and i went on to work a lot of military space activities but then towards about 2010 uh i started to see you know what was the fruit of spacex which you know elon made space safe for investing and we started to see a lot of vc money take interest in the space industry so i helped skybox imaging get started they eventually sold to google for half a billion uh we were building spy satellites basically for a couple million dollars a piece that became part of planet so that was kind of the early version of planet then there was a whole bunch of whole bunch of follow-ons to that so this flood of startups began about that point and uh been involved in you know i think 12 of those since since that point uh culminating today in phantom space which i'm trying to solve the the problem of access to space which has been you know a theme since 2010 of a problem that that really constricts this commercial expansion and that we're currently experiencing so you kind of accompanied all of the you know recent very interesting phase of the development of the commercial space sector i guess starting from the late 90s early 2000s right i'm kind of ignoring the satellite communications constellations from the mid 90s but sort of some of the legal changes regulatory changes took place and the big nasa projects and then spacex being founded blue origin we found it like i said in the 2010s companies like skybox now looking back over those last say 20 years has this kind of played out how you imagined it would play out or has it been has it been very different it's a good question yeah i know it's quite different than i ever thought you know if you go back to even further than 20 years ago you know the entire industry was nation state dominated and most nation states don't get stuff done very efficiently or sometimes even at all and it's always expensive and political and so on so those of us who you know sort of had this this itch to do things a little speedier and get it done we're always looking for ways outside of the government space and you know we never imagined that that the commercial sector would take on venture capital money you know we always kind of imagined that it would have to be you know high net worth uh billionaires that that was what we saw you know standing there 20 years ago i mean elon was basically that and we had uh beal andrew beal who started a rocket company before elon failed at it you know there was there was just this line of dead bodies of these these people that tried to do it deal with that kind of money and there were there was a flaw in that kind of money that you know we knew about that that uh you know this commitment of one person uh that that we tried to ignore but once once we got the attention of the venture community and and we showed that we could actually make some money at this it changed the character of it tremendously for the better became much more market-based and uh in fact i would say today it's stripped the capability of what the government develops in terms of new technology multiple folds so i see a future now where the government is going to rely on commercial for space technology development rather than developing it itself they will become you know net users of that technology much like other technology uh you know i use the analogy of the iphone you know would you want the government building an iphone the answer generally is hell no and uh you know so uh we like these things commercial the government adopts them uses them and that's the rightful role of government most people would agree and uh here we are so so we never really never really imagined that anything but nation state dominance would ever be here we never imagined that the cost would come down to where they're at and we never imagined that there'd be so much innovation flooding into the sector nobody saw that so talking about some of the things you were involved in well i guess i could ask you the same question about spacex where you were involved at the very beginning has has that company played out as you thought it would play out at all not at all so in my very naive thinking okay you gotta you gotta forgive me for where my mind was in 2002 and we we started the company in like december of 2001 and uh you know elon's stated purpose was to build a rocket to take our mission to mars and it was cheaper to just do it ourselves than it was to deal with the russians yeah there was not really a discussion at that early point about how we would commercialize it but chris thompson who was you know one of the early guys there that i recruited and he's now my cto at phantom and i and a couple others started thinking about how you know how can we make this a sustainable thing how could we build launch vehicles that that would make money and uh you know we started architecting different vehicles the falcon one was really a small vehicle that we thought could be mass manufactured and that we thought that the small satellites were probably the future uh but we didn't know how fast that would come and there really wasn't a huge market for it then and i architected the falcon 5 which never got built that was the delta ii replacement rock and so what i didn't realize i did but i didn't that was that elon's real goal was to send humans to mars yeah you know early on i can tell you uh you know before we decided to start spacex he would you know tell people hey you know we're gonna go build this rocket ourselves and then you know sort of after dinner he would show me these base for mars faces uh plans that he had somebody drawing up you know my advice to him was to put that away that's like talking about aliens uh you've got enough credibility issues with saying you're gonna build a rocket you might get some insane asylum for that investors yeah i'm talking about scaring people off so so no i you know as i watched this elon told me and i believed him at face value that he was going to put 100 million dollars of his own money into this and that was it and you know and i knew he had the money but i i thought well that's not going to do it right that's not going to make it and i never could conceive that he could convince anybody to write a you know let alone a million dollar check a 50 million dollar check like he like he did steve jefferson so you know elon's ability to raise money was completely foreign to me so i didn't see that part coming and i i i evaluated the company along the following lines i said look probably the best value it's gonna have is what he put into it that's the best outcome and uh you know we were talking about five percent stake in it for me and i said well that's five million dollars i go make that on my own in a few years and so that's what i did i went out on my own and started a consulting company i made really great money and so for many years i was pretty smug about it having made a great choice and you know elon was difficult to work with so i was relieved i didn't have to uh it was 3am phone calls and things like that but none of us saw this guy's brilliance i don't think i mean we knew he's smart but but he has this whole plan in his head he knows how it's going to play out was was really news to me he didn't really share that with most of us which is kind of surprising you know tesla is the same thing i got to talking to him about tesla you know because i'm a car guy and uh you know i was criticizing you know giving up the roadster well i came across some pitch decks that that he put together for for tesla from the early days it was very simple we're going to make the roadster use that money to make a a commercially viable uh uh consumer car where you use that make a better consumer car and then what we're doing all of this we're gonna we're gonna essentially start a whole new industry of of uh non-non-petroleum-based vehicles i mean had he told me that i would i would have totally seen a different thing but elon kept a lot of that to himself and so you know most of us were required to work with him on on the basis of being 100 in yet you know i in particular never saw his vision so so i left and uh i never expected him to succeed uh but once they started to um i started to pay attention and i started to really look inward at you know why i made the decisions i did and where i was wrong and uh you know what i didn't see and uh you know i gradually very much admire the man and very much admire what he's done so yeah i perhaps i should have stayed but i didn't and that's that's the way it is that's the rest is history but i do think i mean i'm sort of trying to make a connection to phantom space and the current state of the space sector as well there's a couple at least a couple of elements in the spacex story that you have already touched upon which i do believe are relevant still today so so one is that decision or the famous story that elon went to russia and try to see where you can get a rocket right he didn't necessarily have to take the entire rocket right he could have just decided he does the the frame in the us and like some usemash or something engines from ukraine on it as other people have done until very recently right and that i think continues the question for many small launchers up until today is sort of like you really have to build your engines in-house or can you just take somebody else's engine so that that's one question i think which is sort of relevant from the spacex story and the other one is just probably even more relevant and i'll ask you to comment on both of those but the second one would be that i think part of elon's brilliance has been that you have starlink and of course one of the functions of starling as i understand it is to you know hopefully produce a lot of cash flow which will finance the marsh missions but it has the nice side effect that it manufactures a lot of demand for his launch vehicles and of course launch launch cadence has been a big issue for launch providers historically yeah so those are really good points um the first one uh about uh you know his his vehicle and uh and you know what what he saw as the you know the right way to do it with you know vertical integration of the of the supply chain was something he and i often would argue about and again my you know coming from the background i came from we always had a supply chain none of us ever tried in the in the government sector to you know make everything ourselves because we could never win anything from the government uh you know if we were gonna we could do all those things but you couldn't propose it and win the government money to actually use their money to do it so you're always relying on you know these guys have done this and they've got heritage and so on so that kind of patchwork um was what i wanted to start with but elon made the point he was right this is one of the points i was wrong about was that you know you have to be able to get away from the the what i call the military industrial complex cost uh basis would be to build your own and get rid of the inherent inefficiencies in it that exist because they do business with the government and at least in the u.s you know i've gone on record as calling u.s government procurement system particularly in the dod a soviet economic system because they have a five-year plan we specify the the product they specify the price and you expect to get a better result than the soviets well guess what it didn't happen right and uh so so elon saw this and uh decided that that was a good plan to control the cost the second thing which i think was equally important was that there would be iffy successful there would be a lot of rice bowls if you will that would be rated and there would be retaliation from other providers boeing specifically one that uh approached me it's at one point about you know taking on elon and spacex and i declined the opportunity to ruin my career with them but uh that you know they they would and tried to retaliate and they would use every lever they had including their strong relationships with suppliers so between those two things the smartest thing he did was to build his own engines and then he went into the avionics and the software and did all that himself you almost universally have to build your own structures and mechanisms because those are all pretty unique and you have to get good at that so so it ended up they pretty much built everything that is not really true today because the supply chain has morphed and it's no longer a government-dominated industry you have a much more commercial supply chain it is still developing we buy our engines for example from ursa major in colorado and they produce them at a price point i couldn't do it for myself you know we've we put in a five year long order our first orders are on on schedule they're they're qualified everything's working uh costs you know it's like a dream come true and you know avionics in our case we license from nasa along with the software for twenty thousand dollars go figure they had an ip licensing program you know so so we found a lot of ways to avoid that and still end up with pretty much a strong control over our outcome you're trading risks okay when you when you develop all these technologies in-house you have you have technology development risk you have cost risk you have to have very patient investors they're willing to put a lot of money into it most of these launch companies you see are requiring 100 to 200 million dollars to just get into space yeah you know that's what i saw in the beginning of spacex which is why i said 100 million wasn't enough i knew that but you know with with the supply chain and utilizing that with phantom for example we'll make it to space for well under 100 million and because we're leveraging other people's money that we don't have to raise and spend and doesn't come out of our valuation so it's a you know it's a different world today than it was back then now i think your comment about starlink is very perceptive most people don't recognize that there's a tremendously positive synergy between making your own satellites and launching and i will say that was one of my ideas in the very early days of spacex was to actually build the satellites that we would launch recognizing that you know the satellite providers back then couldn't make a sustainable business case because their cadence wasn't high enough launch companies had the same problem so my thought was combining those two together so that you'd have a you know an essentially a workforce base and a a manufacturing capacity that's fully utilized and uh didn't have you know strong dips and what not that causes huge losses in it and what what starlink has shown however is quite the same thing but it's the outcome or the effect on the market is different if you look at iridium which i worked on you know we took 14 billion dollars for the first constellation the second one was 2.8 and that kind of money if you go raise it in the commercial markets has to have a very low risk associated with it nobody's going to give you that kind of money unless you can show the risk is very very low you know you could raise a million dollars at high risk but you can't raise 100 million dollars at risk you certainly can't raise multiple billions so any of these big constellations that anybody proposed had to be had to be capitalized at multiple billions of dollars and so one of the things that drives that cost is launch so if you're using your internal launch capacity uh you can do that at your internal cost if you're making the satellites yourself you can do that at your internal cost and your gross margins on these things are roughly 30 if it's well run and and this had the second effect on spacex which you mentioned which is the launch rate goes up and once that happens then the fly-out rate you know drops the net cost of your standing army for every punch and so that's how spacex has managed to get their costs way down and they're the only ones that are operating a big constellation the size of startling nobody else is and i think everybody else is going to have a hard time doing that until they adopt this model we phantom recognized it and this is this is our business model as we do both the satellites and the launch vehicles yet a la starling right we'll do it for customers or for ourselves and for us and we can capitalize furthermore we can capitalize future satellite networks of our own through our own high valuation right rocket companies tend to be valued in the billions of dollars therefore raising a couple hundred million on say a three or four billion dollar valuation is a relatively easy thing to do uh compared to uh you know starting from scratch and saying hey here we are we're gonna we're gonna make this big satellite constellation but we don't have anything of value to put up except our great ideas so that tends to be a steep decline yeah yeah i mean it seems interesting it seems like you know having seen how this works for starling now some of the other launch companies are more or less copying it right i think astra has a proposal for a earth observation constellation um i think um well clearly rocket lab is using its photon platform in one more ways it seems like you were saying phantom is thinking along the same line so what can you tell us what the use case we would be for what kind of consolations you guys are thinking about yeah so right now we have uh two constellations under contract for third parties um one is an iot internet of things constellation and the second one is a radar imaging satellite constellation and uh what we're doing on that is is uh and these guys arrive at our doorstep at various stages we finance the first part of the constellation design and then the first satellite we finance that on our own we do that at internal cost in exchange for revenue share on the back end of their business model and so that allows us to keep the intellectual property of the satellites as well as uh give give these startups something of great value that they can then go out and raise the rest of the money to build out the constellation so we will then build and fly out the rest of the constellation on our rockets and build the satellites in our factories and uh do that at a at an advantage cost not not necessarily our internal cost and uh that's one part of the business model that's actually very very popular we've had to sort of put the brakes on that because we reached capacity what we can handle right now on that we have several other satellite contracts as well they're not constellations but uh the the one that we're planning on ourselves uh is what we call phantom cloud and it's essentially a data back hall we're looking to essentially take ground stations and put them on satellites not not literally but figuratively and functionally and so that function then is absorbed into a network of leo satellites where if you're a satellite operator operating above the constellation you simply broadcast down to it we take care of moving the data through our to our various uh satellites down to a ground station at a very low latency of you know a few minutes rather than something on the order of hours like it takes you to wait for ground station so that's the beginning of our of that application we have layers that will add to that that have interfaces with the connected car world we're looking at connections into the essentially equivalent of iot and even potentially a poor man's uh startling which would be a an ability to talk directly to the 80211 devices on the ground and in the public license bands without uh having to get special licenses for it so we're still working on some of the some of the patents there and some of the technology to accomplish that but that would be you know sort of the path that this constellation takes so in the first examples you mentioned um the iot and the and and the radar i assume that's that's that's our synthetic aperture radar right um so those are startups that came to you and so what do the startups provide do they provide sort of the payload and then the whole like uh downstream back end so to say like getting the customers and then you guys do the rest is that how i should think about it yeah in the case of the iot you know they're an existing iot network that that has been around for a while but earth-based and then when they add a space-based layer to make it global and so they have the technology on the on the transmit receive and and the in the back bone for the data distribution so we clearly use all of that we're working with them to re-engineer and space rate their payloads because they're not space people and they would allow us to operate the satellites but then it would operate the network in the sense of operating the data side of it so in terms of the the radar imaging constellation uh it's very much a payload provided by the constellation operator because we know nothing about radar well i can't say nothing but we're not radar experts for sure and we know how to build radar uh compatible satellites because we already have one under contract and uh so so you know they will uh then operate the uh constellation theirs is aimed at at military applications where they do a data sail to the military customer so this is my summary i thought of this and correct me from wrong of course it sounds like so your combination of like you know you have the the launch kit in-house launch capability you have to in the in-house spacecraft capability but then it's basically also offering like what sometimes people call like space as a service right like especially especially if it's like somebody like you said like the iot guys who actually not space people you try to take out the entire friction of the process right is that sort of yeah it's exactly right so my theory is that this the space business to get to the next level of of volume of you know advancement really requires two things one is we have to get past launch and and access to space being an exceptional thing and it has to be an accepted everyday thing and so that requires much more frequent launch uh and then the second thing is we have to lower the barriers for non-space people to bring their ideas their talents their innovations and place them in space and you know an example uh it would be websites when i started my first website i had to know html and that was i don't know 15 20 years ago and today i go out on squarespace and i put together a much better site you know in in 30 minutes and not a single day yes i mean let alone i mean i love that comparison right in the internet i'm old enough to remember the same thing you're remembering there but now like if you want to set up your internet shop right you just go to shopify and then everything else is abstracted away and i guess we're only we're probably still very early on on that um let's say a simplification journey in space i suppose i'm sure yeah no space is still dominated by the geeks right and and we're we're an arrogant bunch and you know we don't necessarily want to teach people and it does take a lot of years to learn these esoteric lessons and so on so we've got to find a way to to essentially close that gap and make make the whole business of space transparent to the innovators and then ultimately to the users it sounds like you're thinking a lot about this this is friendly something i'm thinking a lot about it and i call it by various names like i talked about friction very often i say we need to take the friction out of space and so it becomes you know as normal as let's say now i think it's fair to say that artificial intelligence is now normally used in almost every every business but that was not the case then that was not the case 10 years ago right and then somehow we managed some of you managed to kind of make it normal do you have any sort of vision how we could you know promote the use of space to to so it becomes normal for non-space businesses to to use space technology yeah i mean my my ultimate vision is something where um you know i don't know it's spaceapplications.com [Music] name that you'll log into and it says what space business do you want to start today and say gee i've got a i've got a communications ideas you click that it says what kind of communications would you like to do and you choose between you know four options in your satellite satellite to ground person to person you know and then and it goes through the whole process and then it puts you in touch with people who might want to find nancy who might want to build it who might want to operate it and before long you've got this it's like buying a car right i can go out and configure my car on on the website and then place the order by calling the dealership and then you know then it gets a little more involved because you gotta deal with some of these things but that's kind of what i see the future becoming and on the hardware side you know in order to enable that we have to have systems that are software centric rather than hardware centric right now most space systems are hardware and so that needs to evolve and i think it's evolving in that direction to the point where we can put software expert systems in space so that uh you know these kinds of various retasking of a single piece of hardware can happen right clearly you're not going to make something that's designed to move bits uh you know receive photons and so there are some physics that can't be overcome but by and large i think we can you know make a sort of a generic communications satellite for example uh or a generic imaging satellite that you might have a number of different bands you can look at and so on um that'll take some real advances in technology but it's got to be there along with the software side of it and and that you know once once the space business starts to look like the software business like tech as we as we refer to tech in the bigger picture i i think we've got something that that'll just grow out you know out of bounds in no time it's it's it's equivalent to me of the economic opportunity the new world was 500 years ago and we don't know what to look like there's no way to know what it'll look like like 500 years ago there was no way to know what this place would look like yeah i mean i think it's it's not even 500 years one could say that maybe in 1996 people trying to project the internet had no idea what happened why i remember i've tripped over so many billion dollar fortunes you know i was a very early adopter of the internet and i remember looking at it and thinking well you know leonard cohen sites are out there and i like leonard cohen's i read those and then there's there's porn like okay well that's obviously yes yeah and then there was uh i don't know these sort of self-promotion things these these strange little little sites you know kind of pre-facebook kinds of things and that was it i said i said how are you gonna done this nobody's gonna sell anything on the internet i remember this very well this is actually so this is the kind of picture we skip when you know when we're talking about our own i run a venture fund right called etmc ventures a space venture fund i would say people i believe this is similar to the internet in 95 or 96 and i'm old enough to remember that at that point in time most of the internet entrepreneurs were very few anyway right but they were pretty much computer science people like mark and reason which makes sense in internet computer science and then it took a few years and then you got non-computer science people realizing what was going on how big the opportunity was and it unleashed the animal spirits and human creative entrepreneurship and that's what i think we have to unleash in space and it hasn't happened just yet hasn't happened at all no it's you know it started off as a few billionaires poking at it and uh you know that was our original view of how things were and then the vc money comes in it literally just pokes at it and and you know no no offense to anybody who's a vc but most of them don't have the first clue about the space business and they throw a software template on it and that will change right it'll be people like you who come in specialize in space investments and so on but that has yet to really happen on a hard scale it's it's happening and uh you know like you say the the entrepreneurs they'll find the opportunity and they'll go crazy with it it's just right now you know this podcast is a great example i spent a lot of my time explaining to the public what the opportunity is of space and so i'm this you know the space evangelist if you will about the economic opportunity here you and i both see it right and we have we have difficulties articulating it because it is it is uh very complicated just like the internet was important for people to articulate how that would actually be used yeah but i remember i spent probably 10 to 20 of my time on this what you call the evangelism because i think it's so important to get the message out right now but backing up um you were talking about something interesting which you're mentioning like the software right and i guess software correct me if you think otherwise but that's like a prime example of like right now we seem to redo the software stack every time we build a new satellite like it's it's ridiculous right so this touches upon also the element of standardization or inter interoperability and maybe the lack thereof and would you think this is like another thing we we need to change and then is that something where maybe i feel like that's something that the government could help and maybe like you know some of the things that the sda and the military us is doing could you know help us push for more standardization and and hence you know help us along the way there well you know strangely i think you know i wouldn't normally say this but you know if the government picks a winner and a loser uh by virtue of the fact they're the 900-pound gorilla as we say uh in in the business you know that that will choose the standards like beta versus vhs you know once that was chosen it didn't matter that most people think beta was a better better yeah uh vhs was what you could buy right and so a certain amount of that has to happen and it's it's mac versus pc i'm a mac guy but i was always a piecing guy because that was what was available until i started using the mac and i'm convinced the max better but you know the government and everybody else in the world uses the pc so that's by far the dominant uh use and and it's really going to come down to that and what's interesting is the supply chain around the world right now has has shifted you know there used to be a huge supply chain for satellite and software uh components here in the us and suddenly like eastern europe has proliferated the baltics uh hungary uh you know a lot of these all these european countries france amazes me i've worked there and we used to make jokes about you know the fringe show work ethic but by god they're doing great stuff with the startup space it's amazing how that's taking place in it a lot of its software and avionics and electronics and things like that so so you know there's there's going to be some shifts like that going on around the world too and one of the things that most people don't think about that i became aware of uh in the last three or four years is in the us government at least they're very concerned about supply chain security that it appears that there are bad actors that are you know nation-level bad actors the seek to sabotage supply chain uh to seek a competitive advantage oh what a surprise right we're gonna we're gonna do something like that but it just sort of brings you back to reality hey you know the world's not uh suddenly transformed into this wonderful place just because we're doing wonderful things it's we still have to deal with those old realities yeah i mean you certainly can't put all of your eggs in um in one basket right i mean german by birth i'm painfully aware of that on the energy side but okay that's a long topic but on the on the space side actually let's open up a bracket on that just maybe for a few minutes because you have so much experience in the old soviet union and in russia obviously that used to be a not insignificant part of the space supply chain i mean use mass engines from ukraine falco in space pro propulsion soyuz launch vehicle i mean i guess that's pretty much all of the table now how do you see the effects of what's going on right now the effects of the russians essentially removing themselves from the space business is profound i think it's shocking to me i watched the russians shoot themselves in the foot as we like to say twice you know once with elon when we went over there they could have sold on the damn rockets and sold them really cheap and he had never built spacex right but he built spacex and he arguably put the russians out of the commercial launch and then what they have left of it which is what they negotiate with nasa with esa and you know some of these you know like oneweb and some of these other guys you know with ukraine reaction they shot themselves in the foot completely again by saying well we're gonna take our marbles and go home and you can't play with us anymore so really childish reactions on both sides which is kind of interesting you know i i don't um my experience with the soviet bear as i call it is is not one of of triviality um they're they're a very dangerous uh foe if they become a foe and i fear that that what's going on is is sort of russia you know sort of turning inward a little bit in an isolationist kind of way and i think the end result uh is going to be most of their rocket technology is going to slowly die because without that western dollar without that western demand the ability to keep a lot of these manufacturing lines up and going is going to die i know even in the early 90s when i was over there those one things we were finding was their supply chain within the former soviet union was really disrupted from you know the the split of the soviet union a lot of it being in ukraine but then just you know small groups that no longer were getting paid by the government disbanded and you know they would build this electronics box so to get a uh a telemetry system for example for a solar sail was a nightmare because nobody in russia made it anymore and you know clearly they knew how to do that but they had to source that stuff out of germany and uh so you're just going to see that i think accelerate here uh the russians have done a pretty good job of destroying the infrastructure and in ukraine you know labeling as a weapons manufacturer they spent about 20 cruise missiles into the the nepa factory there they use usemash factory saw some pictures of it and some friends that were over there that saw it as well it's gone the people are gone uh that that talent and experience has been distributed to the wind so what we're witnessing now is a reshuffling of the entire supply chain worldwide on launch it's going to cause launch shortages we're seeing it already at phantom we're getting enormous enormous demand for our launch services and our first launch is about a year away and we we probably have about 15 launch service agreements we're going to be able to announce in bulk here we get enough of them together we'll do it but we're very very busy signing up new customers um you know in in russia it was the trigger for that a lot of them have come off of those vehicles so you see a lot of these other startups that have relied on on the ukrainian engines that are really in a crisis and they haven't started to talk about it publicly there's been some some line in here and there but a firefly for example uh i'm told internally that they never completely built that engine in the u.s the reaver that they had gotten from ukraine that was still being built over there so they may they may have some issues there that may be why they teamed up with northrop grumman uh which they announced at the smallsight conference to to do liquid propulsion engine work you've got by derivative you've got uh astra who licensed that you've got a number of the european startups with pump fan engines that are uh you know searching for that kind of expertise we know ursa major gets a lot of inquiries now from people who've lost that ability right and smart of us to have bought their capacity for the next five years because they're not able to take on new clients so it's really it we're in a shortage in the world and and this is kind of what i predicted anyhow but the russian actions have really exacerbated that closing that that bracket and we could talk about is probably four hours just about this topic we're coming back to phantom space right now we've talked about that you know you have the launch capability you have spacecraft capabilities there's space as a service and so forth but you were talking about sort of like space exhibition and elon's vision and how it wasn't completely transparent to everybody at the beginning but what is is there a way you can summarize your vision for phantom or if i could ask in another way like if you're talking to like a potential investor or a potential key employee and you want you want to get them excited it's like how do you summarize the phantom vision we like to say we intend on becoming the henry ford of space by applying mass manufacturing technology to both launch vehicles and satellites to lower both the costs and barriers to getting applications and ideas in space okay so a lot of these things we've already talked about the need for high cadence um vertical integration so okay terrific another question i had so like you mentioned somewhere beginning you were involved in even in recent history and something like a dozen startups um well-known ones vector moon express just a couple of come to mind isai prominent radar company of course york a prominent integrator so so you've had a lot of different experiences how have all of these experiences flown into phantom and what are so i don't know like maybe a few key lessons that kind of flew into into phantom space boy that's great that's a great topic uh like you said i could go for 40 hours on that you know i i've i've seen a lot of good bad and ugly right in all of these things and uh you know on on most of these companies i've been involved with they've been successful moon express was not vector was not you know so i saw a lot of the things you don't do and in in many ways i think those have been more valuable to what we do at phantom than than the ones that were successful because it's easy to not see why those things are successful sometimes uh it's a lot easier to see why things aren't and so the big lessons i have for a startup or as follows the first one is that when you put together a team it's very very very fundamental and the most important thing you can do is have a team of people who are like-minded right i'm not talking politically i'm not talking you know that they they all believe in the same thing but they're fundamentally the same type of people right so at phantom for example we think of ourselves as builders makers and doers rather than pontificators and paper pushers and so we value as a group this rugged individualistic accomplishment and responsibility for what you do and the value of creating something that's a value that that's that's something you can touch and smell yeah when i look at countries around the world i you know my wife's german so i i also i see germany as being very much built on that so that sort of ethic of you know we've got to build something that's got to be high quality it's got to be done right you know so so whatever it is you're doing you have to figure out what that what that like-mindedness is and you have to recruit along those lines right otherwise you have people who who don't fit and you know they're going to want to take things in a different direction and create strife and it use up a lot of energy and time and it just never works and and uh you know it ultimately becomes fractures in in the company uh there was a line in in a movie an american movie where it said this was the crack that let the water in the in the rock that frozen split the rock apart you know that's that's how that's how a mismatch is do so that's number one number two is you you never spend any money that doesn't advance either your ability to raise your next round of money or get to your your next major milestone you just don't there's gonna be a lot of pressure you know for example get your manufacturing capacity ready for when you when you do get your product going you can scale it the problem is sometimes you don't know exactly what that schedule is and you use resources in in a way that you could use otherwise it would be better put to use so so that kind of you know sort of fundamentally cheap ethic if you will is really really important to making uh making these these things turn out and then you know lastly i i would say that you you have to be very transparent as a leader you have to be very transparent with your staff and you know you obviously don't have to show them your bank registers but you know you gotta gotta tell them what what it is over and over we're trying to do make sure that they all understand that and that they're in line with this and what their part in it is what their benefit of of this this working out is if people aren't in line with that you got to get rid of it very very quickly and you can't afford to have a bad people around so those are really kind of the big ones they apply to all other businesses too but i think the you know the the one about you know how you spend your money in the early stages is very particular to startups um and and very very very important i've i've had a lot of vcs and other investors give me some very bad advice right and as a leader i've had to later on sort of understand that you know i appreciate their perspectives but you know they they invested in me because they believe that i know this business and i know how to take it to where it needs to go so to be polite and say please let me do that so following on from that if you had to think about the sort of core dna or core competence what you will call it of phantom is that some of the things you were talking about just now like the very special culture and team or how would you define the core did you yeah the dna is you know we're here in arizona which is a not a place everybody wants to live and it turns out it's become a good filter for you know the kinds of values we have as a group of people you know it's a bit of a libertarian sort of existence here live and let live and people you know any walk of life or welcome uh but we don't impose we don't impose sort of a world view on everybody else we're very we're tolerant of individualism right the other side of it is that it's a an environment that's very free from government intervention and i think that's you know in the early stages of an industry like we're at very important because you know the government can skew markets and we've seen it you know in our lifetimes well-intentioned actions uh end up benefiting one sector but it you know it causes the whole entire thing so we're really able to get the help from the government we need by being here when we need it and avoid most of that interference but uh you know in the end it's it's the place where we all like to build things and i think that's probably if i had to say one thing that's in our dna is we're all builders right a lot of us are race car people we build race cars in our spare time i do uh mike's go does um my ceo doesn't but you know he builds other things you know he's into his house and does but we're all you know one way or another uh very hands-on very uh very busy to building things okay are you are you guys hiring right now so we're closing the series b and uh we've stopped the higher until we're done with the b but we'll resume probably in about a month or two terrific terrific and i'm just going to slightly back up i realized that we were talking about your launch capability all along and i haven't actually asked you so just to summarize your your vehicle sort of like besides the capabilities yeah our first vehicle is called the daytona and yes it's named after the racetrack and uh it's 500 kilos to orbit uh is the you know sort of the standard capacity that'll service about 80 percent of the small satellite market and we've done a lot of background work we think that's the right size it's uh you know block one it's got three blocks uh that we're developing block one which will be the first one we fly is all aluminum uh blocked who will have a lot of composite pieces again this is another illustration of how we don't spend money until we need to we recognize we can still get a vehicle to orbit with the metallic structures and that way we don't spend money on these expensive this expensive tooling and fixturing for the composites once we show the basic design works then we'll start converting piece parts of the vehicle to composites and that was a we thought a less costly upgrade given that later money is less expensive than early money and it gets us there faster so ultimately we go from what's nine engines nine handling engines on the first stage for our block one to one ripley and uh we're using the ursa major five 000 pound cadillac box kerosene engine that they've qualified and i think they have about 40 000 seconds of run time on on their on their engines so a very very well understood engine um and we're selling it for four million bucks uh so you know if you look at that compared to rocket lab who sells 180 kilograms for about seven million it's quite a bargain and we know the the the cost of our our piece parts to a very precise level because we've already bought a lot of it and a lot of it's on order uh and so we're truly coming in for our first unit well under four million dollars we'll be flying out of vandenberg first we have uh slick five which we've released from the air force or the space force i guess that's the old dance a scalp pad and we'll be putting together a dual pad out there on the slick five we're working on a multi-user complex out at cape canaveral and then alaska is another one we'll launch out of i can tell you we've got clearance from vandenberg for 48 launches a year which i think is more than even space access clearances for so we think that that is the the thing that we need to enable our business model long term that's one of the differences between us and a lot of the other companies is we start thinking about how do we launch a lot of these right up front we think the business of getting a launch vehicle operating and making them in so-called mass is is relatively easy compared to the business of how do you deal with the regulatory side of launching a lot of them so we you know we we started early on with that regulatory side and i've had great successes so far and so again coming back to vision i mean we've touched upon this a few times already and said okay to the henry ford of space and all of this in the various positions often but if you had to look 10 years out what is sort of like ideally where will phantom space be well i i like to think of phantom as sort of the next spacex i know uh other people have said that same thing but you know in a lot of ways we were the same dna that created spacex and uh we have the same idea but 20 years later so spacex adopted to the micro satellite is really the kind of way i see it okay if you don't mind giving your ample expertise um there's just a few questions i want to ask you about the the space sector in general and maybe in a if you don't mind in a rapid-fire way because otherwise we're going to be here for hours which i'd love i'd love to do but our listeners are kind of used to one-hour podcasts so so maybe no particular order well we can start with spacex starship may fly may try for orbital relatively soon um how do you see the so-called starship effect some people call it a potential starship singularity yep i don't think starships built on satellites i think it's built on people boring machines to mars and lots of teslas to mars osam or orbital services and manufacturing businesses big topic including in the government how do you think is going to be the evolution of that market i think it's a great idea i think it's 50 years in the future space debris how worried are you so i'm one of the few that are not because if you launch the satellites in the right place mother mother earth takes care of the problem for you it's going to have to be a regulatory solution that's market-based like insurance for third-party uh collisions space workforce and workforce development is there is there a bottleneck is there a risk of a bottleneck is there something we should do yeah the there is a bottleneck and the cause of that is the universities which are horrible and uh you'll find most of the uh people that are getting into startups are doing it without any in the university degrees uh which used to be considered required so we've got to rethink the education system but really to make this this much more viable industry then we've already touched upon supply chain and and you mentioned the parts of the government sometimes seemed like a soviet five-year system is there still something we can improve on the supply chain and what are the specific things we could do yeah i the continued diversification of the supply chain is is really great and i'm encouraged to see venture capital starting to think about this i think you know venture capital can play a very important role in how the industry develops if they take a thoughtful approach and uh you know i don't mean to make investments where it won't make you money but i actually think there's a lot of money to be made there uh that a lot of vcs haven't recognized that yet but they are slowly coming around to that we can stay on the topic so um which is basically financing space startups and space activities and you know we fix it we have venture capital coming in we had all the whole spec race for a few months so to do you think space activities are financed in the quote-unquote right way or is there something we could further optimize there well there's probably no right way to finance anything right it's a question of how do you get money uh it is an art still to raise money and there are only a few of us that kind of get the art and that's the bad side of it uh but it's it's a growing uh it's a growing capability and i think you know ultimately the the the lps are the people who write the checks that go into these funds recognize that that spaces is the future so you know i would think hollywood really for painting a great uh notion of our future in space as humanity for really developing the underpinning for the space finance ultimately that's where the money comes from and uh you know i think the market will work out whether or not it's vcs or pes or you know we're finding a lot of family offices investing directly with us for example the the the center of gravity's moved away from the vcs and i don't think that's a bad thing also of course i have to talk my book and say that family offices should um remember it's a deep tech sector maybe they should align themselves with these special sbcs like like um no that's right that's absolutely correct i i could agree with you more and then another question about the specific space activity so you've been involved as we mentioned in moon express and we're just a few days away of all goes well from the artemis one launch where do you see the lunar market going yeah it's interesting i i think the lunar thing was a bit of a flash in the pan uh there's there's sort of a resource argument for working the moon there's maybe a practice to go to mars argument but ultimately it still takes a lot of energy to go there and so i see the moon not dying but i don't see it being the main thrust of energy you know once elon makes his first trip to mars everybody will start thinking about that and uh you'd be surprised when he plops boring machines down and starts putting holes in the ground and people can live underground and things like that you know i think i think the imagination will any human energy will go to that gosh we'll come back to to that part in a minute both these things together like the last few minutes uh plus some more i asked you um towards the beginning of the podcast um to sort of reflect back on the last 20 years and how it was different from what you imagined what people imagine i'm going to ask you the very unfair open-ended question sort of what do you think how how may the space sector evolve the next 10 20 years what are some of the things that may happen and and also what are some of the things that people may be under focused on and over focused on so whatever i tell you is going to be wrong i can tell you that but what i think will probably happen the next 20 years is we'll see the business of financing new space uh supplying new space ventures and that whole business sort of mature pretty dramatically we're seeing the government falling behind it we're seeing finance falling behind and we're seeing you know the lp's falling in behind this i think that'll only continue to mature and uh you know assuming that that uh there's no you know major catastrophe in the world i don't see anything standing in the way of that happening because there's so much application in space that's going to drive value that that you know people are going to continue to put money into it i think the other thing you'll see is eventually spacex will go to mars i think elon that's what he intended from the very beginning he's made it clear later on in the company that's what it was all about that's what starship's all about it's too big to launch satellites if you look at you know 100 metric tons per launch only seven of those will launch the entire world supply satellites every year so it's obviously you know aimed at other things like launching water and heavy stuff so you'll see that happen and that will be maybe maybe in the 20 years maybe it's a bit longer lead to what i think will be the most famous human being ever and i don't know what their name is whether it's male female or otherwise but it'll be the first human not born on the earth and that'll be on mars and uh that'll be you know we think of uh you know armstrong stepping on the moon there's a great you know advancement in mankind that'll be the next one and uh arguably more famous than neil armstrong was and then finally i think you'll you'll see space become such a regular part of our lives it already is that we don't realize but but in such a way that um you know it becomes fundamental to our economy right now if we lost gps and all these other you know space we still go on but i think it'll be so fundamental that the economy wouldn't work without it much like we couldn't work without an electrical grid so that integration will continue and uh become become a big part of what we're doing so so another way of asking this forward-looking question of course um i'm inclined to ask yourself an investor is there something that should receive more investment in the space domain than it is right now well i'm going to defend launch because i think nobody's solved the problem i think there's a lot of very unserious companies out there that treat the as a as a hobby rather than as a business right so people have to think of launch as a business so i think there's still a lot of room for advancements in launch and maybe maybe you know maybe one or two players will emerge as the leaders i'm hoping we do um you know time may be right um because we all know first of market is almost never the ones that dominate it so so that one's always there i see communications as being probably the largest uh the largest sector that will continue to consume large amounts of dollars because it produces large dimensional value you know moving bits from point to point i don't care how you look at it it's far more cost effective to move a bit from point to point on earth through space now than it is to dig cables and you know terrestrially uh there's a lot more that destroys those networks and so on and then uh i think you'll start to see uh a lot more applications of imagery there's a there's a notion out there that imagery is saturated the market's saturated with them i know i think the yeah the the demand for imagery is infinite just like bandwidth right every time my neighborhood they put in you know fiber into the neighborhood and i get the biggest baddest fiber i can in my house and everybody else is i don't know what they're doing with the fiber but i can't you know they consume all the bandwidth that's there same is true with imagery because you know for some people like if you're a roofer and you want to just look at homes that have rougher problem roofing problems to go solicit them maybe an image every month is good enough but if you're you know if you're a warfighter an image every minute's what you need so so the dynamic side of of the earth imagery is is really where the infinite demand comes from and if the price point can get down and the convenience of utilization goes up then you're going to see an explosion there uh in in in much the same way you've seen an explosion of telecommunication and then of course you know supply chain has to support all this because you know ford doesn't build everything themselves general motors doesn't move themselves we know that this is the way things are done yeah this exists for a reason to totally agree with you on all of these points especially i mean the imaging point i think before we started recording i mentioned to you i'm at the international space university summer course right now and we literally spent the last few weeks talking about using space data imagery data for non-space sector use cases and i think we are really just scratching the surface because the space people don't understand the non-space industries by and large right and and the non-space people don't understand what space data is available but it's a very long topic by itself and you can back some of the points where we talked about be able to take the friction out of this process and yeah we could talk a long time about that and it'd be great i know i'm sure companies like phantom can help us a lot a lot in taking the friction out there if the market takes us there that's where we go right we're we're market diagnostic we we think we know what the market's going to want but maybe it'll be all imagery i don't know we'll just see let's um let's wrap up on a couple of fun questions um one which i always ask and one which i i think i've never asked before but you've mentioned um race cars a few times now and it's clearly a question of yours what's favorite favorite race car do you have one porsche of course the porsche cup cars they they kill everybody the germans have taken what is what is really a poor design and optimize it to the point of pizza hell out of everybody yeah i i own one two three of them so okay nice i can endorse that being a german clearly and then the question i always ask is about science fiction whether you enjoy science fiction and if so if any favorite works and it could be movies tv books no i don't uh because it irritates me somebody gets one little point of it wrong i lose all interest in it and i stop watching the movie or reading the book so it has to be really really hard science fiction which is that's to be accurate yeah yeah yeah that's accurate yeah so andy andy weir's uh the martian was the only one i liked by the way you know i watched that and i said everything about this is accurate and i loved it i loved the story dee dee um you're talking about the movie as well right the martian yeah the movie and the movie yeah and if i remember correctly um so jim green the former chief scientist of nasa who was previously a guest on this podcast i think he was the advisor to the movie which i explained explained how they got the things right and andy the guy the author he's one of us right he just wrote this and it was like a self-published thing on amazon and somebody picked up on it yeah so no that one that's the only one i really like of course i love the old star trek but not for being science fiction that you know james kirk was always my idea of the great leader right and i still i still sort of swoon when i see old you know james curt from from uh from from the 60s you know yeah yeah yeah well terrific uh jim thank you so much for coming on today best of luck with uh phantom space you are working on a lot of things which are very important for the space sector so yeah i hope it's going to play out as you imagine the next few yes so too thanks guys and that's the wrap for another nominal episode of the space business podcast once more if you enjoyed this please leave us a five star rating on your favorites podcast platforms such as apple or spotify you can follow us on twitter at podcast underscore space you can support us at www.patreon.com forward slash space business podcast lastly if you have any feedback including ideas for guests and that may include yourself if you have an interesting space story to tell or interested in being a sponsor drop us an email at spacebusinesspodcast gmail.com see you for the next episode