Why won’t there be a SpaceX in India unless…by Narayan Prasad
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| A SpaceX happens not only because there is a vision of an Elon Musk, but also because there are people who buy into the vision in different quarters, be it government agencies, regulators, or investors. |
However, there are some who continue to dream about reaching for the stars, much like they did in their childhood, and take risks to chase those dreams. Over the last few years we are witnessing the emergence of NewSpace in India, with a vision to build world-class enterprises that do business based on developing space assets. Many of these NewSpace companies are built on the inspiration of creating a company like SpaceX in India. This is a moonshot, but one that matches the growing spirit of entrepreneurship in India. However, what makes a SpaceX?
Unlike many other technology sectors, space is one that needs tremendous amounts of skill, investment, and support to provide substantial returns in the marketplace. Enterprises succeed in the space sector because of a combination of several important aspects of an ecosystem. A SpaceX happens not only because there is a vision of an Elon Musk, but also because there are people who buy into the vision in different quarters, be it government agencies, regulators, or investors.
When SpaceX says they are going to lower the cost of space access, they are not just saying they will do so for Americans, but for the whole world. This is one of the key differentiators of how our vision in India has historically aligned against the one that needs to change now. Yes, we were a country that did not have the means to invest into fancy adventures of walking on the Moon, but we did really well for ourselves by investing early into space, reaping the benefits of space exploration for our society. We ran and continue to run programs in tele-education, telemedicine, and mapping of resources. However, we are shy to think of a big question to pursue. Will we just focus on sorting out needs of our local market, or will we build an ecosystem that will take the fruits of our space activities of the last five decades and use it to build products and services that can be sold to the world?
Some may say, well, we already sell rocket slots and launch many foreign satellites. Remember, space is a $300 billion market and we don’t come close to holding even a tenth of a percent of this global market. Why? Because the government cannot chase an international market opportunity and ignore the needs of its own society. Recently, the chairman of ISRO said that we have about 34 satellites and need to increase that total to about 70 to 74 to meet all the needs of the country. What that really means is that ISRO doesn’t have the ability to meet those requirements and also and build international businesses. Therefore, the real opportunity is for people who will dare to build on the fundamentals of our space program and effectively create products and services for the entire globe with business models that are scalable and sustainable. What stands between now and this possible future?
| It is not sufficient for just a bunch of people with passion and skill to come together. It is also very important for financial investors to take a stand to support such enterprises. |
To answer this question, we will have to go back and again review how SpaceX developed. We all only tend to remember the great things that happened, such as the SpaceX delivering cargo to the ISS or recently landing first stages on a barge. However, what we probably don’t think about in our part of the world is how NASA trusted SpaceX and supported its emergence by providing launch contracts despite its initial launch failures. One of the great lessons is to not only accept failure and provide an opportunity to succeed in the future, but also in leadership by enabling a young brigade to build for the future. Remember, NASA has built and flown many different kinds of rockets. However, someone there concluded that by supporting NewSpace companies and providing them with an opportunity, we will see disruption not just locally but in the entire global market. And so it did.
SpaceX is not just a story of getting support from a governmental space agency, it’s also a story of being supported by investors who pumped in millions of dollars into a dream of technology disruption. Remember that Musk founded SpaceX in 2002. That means its current achievement of landing rocket stages is the result of more than a decade of investment. How did it survive? Yes, Elon was already a millionaire and he did put in his millions into SpaceX. But he also had an ecosystem of people in the financial world, such as Founders Fund and Draper Fisher Jurvetson, willing to invest millions of dollars to back such a risky venture.
Essentially SpaceX happened because they were investors who bought into Musk’s long-term vision and saw that such an enterprise doesn’t allow for an exit after three years. It took SpaceX six years to come through with its first successful launch after three failed launch attempts; it was down to its last rocket. That was how close SpaceX came to going bankrupt without a launch contract from NASA. Shortly after that successful launch, NASA came through with its commercial cargo launch contract, and the rest is history.
It is not sufficient for just a bunch of people with passion and skill to come together. It is also very important for financial investors to take a stand to support such enterprises. Most of the investors in India likely either do not understand high tech and cannot make a confident enough assessment, or do not want to stay invested in a company that will take eight to ten years to mature. We can’t afford to categorically judge or brand such an investment scenario. Sometimes, it probably is just a one-off event that can change everything and we have yet to see that here in India.
Now, let us assume that we have an investor ready to invest despite the risks as well as a team and technology focus that have the vision to disrupt not only the local market but bring about a change in the way the world look at Indian startups (of mostly being copycats of successful companies). Yet we may be completely unprepared for NewSpace in India because there are no ground rules for any of the enterprises to work on a product or a service that can be offered internationally. Just imagine a team of young enthusiastic people saying they will build a sounding rocket today and test it tomorrow and eventually want to build an orbital launch vehicle. How many eyebrows do you think they will raise?
Chances are that every Indian NewSpace company will get hit by regulatory issues and requirements for clearances from multiple government stakeholders because of the perceived sensitivity of the product or service. This is definitely not to say that this is all rubbish. Their qualms are very necessary. However, the ability to handle these issues to enable growth is what is missing. The US is in a position of world leadership in space not just because of NASA’s achievements but also for its policymakers taking interest in growing space as a business and being second-to-none in commercializing space. These important gaps in regulatory framework make it very difficult for NewSpace to happen in India.
Making NewSpace happen in India will be very much like trying to synchronize musical instruments with the founders of the companies being lone center stage conductors. The output of non-synchronization is not only bad for the performers, it has an even worse effect on the audience (customers.) Therefore, it is not enough to have the technology and people to make a space enterprise happen. It is not enough for people with bucket loads of money to trust in this. It only happens when we all trust each other and synchronize to play the perfect tune that brings a queue waiting tomorrow to listen. We are at a time when this orchestra needs to practice before it performs for the world stage.
| This is the time to collaborate locally and globally to build great space products and services not just for India but also for the world itself. If we can do that, they may be little Indian NewSpace cannot achieve in the long term. |
So what can we do? Let’s learn from one of the biggest independent successes of our generation in the private industry and apply it to the world. The IT world did not succeed because their first big customers were banks or the government in India. They did because they used their talents and resources to reach out to the globe with their solutions and optimized their work to the best of their ability, regardless of the ecosystem in India. Space might very well be where IT was at its early 90s in India.
This is the time to collaborate locally and globally to build great space products and services not just for India but also for the world itself. Remember, collaborations may not just be technological but also in solving the problems of financing and regulatory frameworks, working with networks investors and space lawyers around the world.
If we can do that, they may be little Indian NewSpace cannot achieve in the long term. Let me finish by recalling the forecast of Dr. A. P. J. Abdul Kalam, the former president of India: “The future generations will look at the Earth, the Moon and the Mars as a single economic and strategic entity.” A NewSpace revolution awaits us.