The Launch Company // building the world’s first multi-user, mobile launch site for this planet and beyond [UP085]

Jay Clouse 0:00
Eric, do you know what I love to have for breakfast?

Eric Hornung 0:03
A big bowl of Jay-O’s. I just imagine you have a box of cereal with your face on it.

Jay Clouse 0:09
I was going to say reviews on Apple podcasts. They give me more sustenance than anything else in my life. They bring me energy, they get me ready for the day ahead. And you know, Eric, it’s been, it’s been a minute since I had a good bowl of reviews on Apple podcasts.

Eric Hornung 0:24
Sometimes I read my reviews right before I go to bed just so I can dream good dreams at night.

Jay Clouse 0:29
If you want to help me start the day right and help my self esteem while also helping us in the eyes of Apple. Please leave a review for Upside on Apple podcast. If you have an iPhone, even if you don’t use Apple podcast, we would love for you to submit a review about why you love Upside. And if you don’t have an iPhone, if you’re an Android user, that’s okay, too.

Ben Kellie 0:50
A year ago, right before lockdown, we moved into this 5000 square foot warehouse and I was like, Oh, this is where it’s gonna happen. And then we spent a year not being in that warehouse. And it started picking up again in the fall. And again, we’re bootstrapped right. So like we couldn’t like call our investors be like send more cash. We just had to like piece our way through it. And now it’s full. It’s full of the gills of different hardware projects we’re doing.

Jay Clouse 1:11
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them, and discuss the upside of investing in them. Welcome to Upside.

Eric Hornung 1:39
Hello, hello. Hello, and welcome to the Upside podcast. The first podcast finding upside outside of Silicon Valley. I’m Eric Hornung. And I’m accompanied by my co host, Mr. new studio setup himself, Jay Clouse. Jay, how’s it going, man.

Jay Clouse 1:55
Pew, pew, pew, pew, pew, pew. So good. We will post on Twitter today a side by side comparison, a little how it started how it’s going of the new home studio, because I am pumped to be moved in and have my recording equipment here. No longer going between apartment to house to record. I love it. When we first visit this place. Mallory looked down here and said this is gonna be awesome. And I said I don’t know about all that. And now it is.

Eric Hornung 2:23
I’m so shocked that I’m the one on the other side of the mics right now. Because I saw a picture and it looks like one maybe your cat was going to take over for me.

Jay Clouse 2:30
Yes. So the struggle with the cat and the old home office was that he would jump up from the side of the desk and bug me. And now my desk is actually kind of out in the middle of the room. So he has all four sides of the desk that he can jump on top of it. And he is taking full advantage this morning literally interrupting my recording by just shoving his face into the microphone. So we’ll have to get some control on that we have a literal cat door that’s been cut into the door above the basement. And we didn’t cut that. And we’re trying to decide if we want to cover it. It’s nice because like he can fit his giant body under it and come down here and visit whenever he wants. But it’s also bad because you can fit his big giant body under it and come down to visit whenever he wants.

Eric Hornung 3:12
When you were launching this podcast studio, this new podcast studio in your basement Did you think through all those these variables like.

Jay Clouse 3:18
Absolutely.

Eric Hornung 3:19
Can come in and out.

Jay Clouse 3:20
Absolutely

Eric Hornung 3:20
Or where’s my microphone going to go? Or did you consult with someone or you just said here I have the vision.

Jay Clouse 3:26
We literally debated for several days on whether we wanted to take the door off of the bedroom and replace it with door to the basement because the door in the bedroom does not have a cat door cut into it but then that interrupts our sleep. So it’s like what do we value more our sleep or our recording integrity? I pushed for the recording integrity but Mallory values sleep a little bit more.

Eric Hornung 3:47
That’s understandable. I think that the recording integrity would indirectly suffer if Mallory and you weren’t sleeping well.

Jay Clouse 3:53
Yeah, and you know I don’t want to this is Baloo’s house too. And I don’t want to interrupt him living his best life.

Eric Hornung 4:00
And you know, Baloo only has one life well actually Baloo a cat. So blue has nine lives to live. But if Baloo were human and had only one life to live, we would recommend that Baloo go check out our friends at Ethos Wealth Management, we’re helping you live the one life you have the best way possible. You can go to upside.fm/ethos to learn more.

Jay Clouse 4:21
Other than that the actual like AV setup, pretty easy to do. I’ll improve it over time. But it’s it’s not exactly rocket science.

Eric Hornung 4:27
You know, it is rocket science. Jay.

Jay Clouse 4:29
What’s that.

Eric Hornung 4:30
Our guest today.

Jay Clouse 4:31
Building actual rockets and launch sites. That’s right. Today’s guest is Ben Kellie, the founder and CEO of The Launch Company. Ben has a degree in mechanical engineering from the University of Alaska Fairbanks as well as a master’s in mechanical engineering from the Ohio State University where I met him and before he returned to Alaska, which is where he lives now and runs his business. He worked at SpaceX designing and operating launch sites. He even ran the first missions to return a first stage rocket from orbit. Crazy stuff, Eric literal rocket science,

Eric Hornung 5:03
Outside of the fact that I am so stoked for this conversation. It’s going to be great to talk about the next frontier, which is space. But we are also getting to talk to a new frontier for us, which is Alaska. We haven’t been to Alaska, Jay. We haven’t talked about the startup ecosystem there. And it’s more and more rare that you and I get to see somewhere new for the first time on the show.

Jay Clouse 5:24
Totally. The Launch Company is building the world’s first multi user mobile launch site for this planet and beyond. By developing standardized hardware, ground support equipment and processes. Ben’s company was founded in 2015. Based in Anchorage, Alaska, and Eric, he is bootstrapped.

Eric Hornung 5:40
You love to see a good bootstrap founder. I think there’s also some news on the capital side for The Launch Company. So look forward to getting into that in this interview as well.

Jay Clouse 5:52
That’s right. We’d love to hear your thoughts on this episode. You can tweet at us @upsideFM or email us Hello@upside.FM. And we’ll get in that interview with Ben right after this. This episode is sponsored by Fundboard. Fundboard is a free tool to help you find startup investors and manage your fundraising process. Fundboardhelps you to find not just the right firm, but the right person at the right firm. Fundboard makes it easy to search, save and share. You can search 1000s of investors ranked by how well they match your startup, you can save them to your Fundboard to create your list of targeted investors. And you can share your Fundboard with your network to game plan how you will approach investors directly, you can build a tailor fit list of startup investors in minutes with Fundboard. And you can learn more at upside.fm/Fundboard. That’s upside.fm/Fundboard and the link is in the show notes.

Eric Hornung 6:51
Ben, I want to start with a question that we don’t usually start with here on Upside. They only do it when it’s a little bit when someone has a little bit longer of a career. You know, we’re talking to a more seasoned individual, but the pun is just too good. Can you take me through a rocketship of your career?

Ben Kellie 7:07
Wow. Thank you, Eric. I appreciate that.

Jay Clouse 7:09
I thought he wasn’t gonna ask at first. I’m like, this is the most obvious starting point.

Ben Kellie 7:12
Okay, well, you know, I will say, I’m 34. I’ve been in the industry, I guess, 8 years now, and not even quite in June, it’ll be 8 years. We always joke that like the experiences we had at SpaceX seasoned us a decade was a year or a year was a decade and otherwise. And I think that was largely true. So yeah, my background, I grew up in Alaska, my dad was a bush pilot. And we had a business where we flew groceries to communities off the grid in western Alaska. It was really cool. And it just kind of imbued me with this, like problem solving mindset, being hands on being in the field and just like creating things, and I went to Ohio State for grad school and came out and got a job at SpaceX and California as a responsible engineer for some fluid systems on a pad. And that was in Vandenberg Air Force Base. And it was going to be like their West Coast launch pad, I guess it still is, it was really funny because the sign is you came up to it with said like slick, which is South Launch Complex for East launch and landing pad. And everybody was like, oh, gosh, you know how cool but of course, the ULA people United Launch Alliance guys down the street would roll their eyes, they thought was so dumb. And you know, because there’s all fantasy that none of that existed. And so I spent that 18 months working my way through the design and build of that side, I was one of eight pad engineers, who all had a fluid system. And it was cool. It’s like a dream job in that we would sit down, we would design it, we do the math, lay it all out. And then we’d go outside with the technicians and the welders electricians and we build it. And then a really curious thing happened one day, which is a rocket showed up on a giant trailer and went into the hangar and we’re like, oh, things are getting real, because it’s just been a construction site, right. And it’s like, Ah, this is like transformed before our eyes and becoming a launchpad. And I’ll never forget the day that everybody left. You know, like, I don’t know, if you’ve been on a on a construction site, or just imagine a very busy place, everybody’s buzzing around like bees, and all of a sudden, everybody’s gone. I mean, there’s like 80 people up to 80 people will be out there and everybody’s gone. And my boss, I become a lead engineer for the launch. And my boss came up to me and shook my hands like your pad. And he like got in a car and drove to the control room because he was going to be a launch conductor. So I’m just standing with my arms, my hands on my hips. I think I’d been out of grad school for 14 months. And you know, had to like operate this pad and and so we were in charge of rolling the rocket, getting it set up, making all connections, get everything ready. And then I ran a little team called Red team that would come back to the pad in a minivan if there was a problem with the rock that we had to fix. And we did come back a couple times. So that that 14 month span was insanity. I regularly works 17 hours a day, seven days a week, but I learned a ton and I got to do all the stuff I love doing as a kid growing up as a bush pilot in Alaska, like I was in the dirt, putting things together, solving really challenging, you know, thermal fluid problems and then making it all come together for this launch. And something I discovered that I didn’t realize I loved, but it makes sense is like operations. So like, how do the people and parts and paper all come together to actually, you know, make this chunk of aluminum, go to space and wrote a lot of the procedures ran a lot of procedures with the team and it was just I got great memories from it like people who like one week before we’re like electricians or welders or like painters and sweepers, it’s like you’re a launch tech now. And they’re like, okay, and give them an iPad and a headset. And so like, you’re walking around with these guys with names, like, you know, Muffy is, you know, Porkchop, and things like that. And like, there’s like tracking vowels and stuff. And so it’s just like this very homegrown, like, Cool thing that happened. After that, I summarily quit, because they were like, well, we’re not going to do any more launches off this path for like, 18 months, you guys are gonna write government procedures. I was like, not me. And so I don’t know why I just quit. And I moved to Seattle, I was gonna do a hardware startup that Jay was familiar with the concept of is this like thermoelectric charger, and I was there six weeks. And this guy called me he’s a buddy of mine from from Vandy. And he’s like, Hey, I’m in town, let me buy dinner. We bought during this, like, Hey, we’re gonna build this barge, we’re gonna put it in the middle ocean, we’re gonna try to land on it. Then I was like, Oh, no. And he’s like, we need some help. Because you come out for like, eight weeks. And just like, do you feel general thing? You know, like, push the push the guys along, get everything put together. And I was like, Yeah, that’d be that’d be super dope. Like, turned into 9, 10 months of just building and blowing up barges and living in a hotel in in Louisiana. We built it an hour outside of New Orleans in a place called Morgan City on the chapel I and then actually wrote it, I wrote in the tugboat as we drag it through the Gulf and around and set it up in Jacksonville, Florida, and took all the first missions out of there. And it was crazy. It was super fun. And I think it took us, let’s see September to I guess it was four or five months to build it the first time, it was a very small team. I think it’s like five of us really on it. And then we got to Jacksonville had to finish it out. And the first time after we blew it up, we rebuilt it in like four weeks. And then the second time we got destroyed in the big storm on the ocean. We built it in like three days. It was just crazy. And so we got really, really good at it. And I realized that I just loved building hard things like solving sticky problems. And I love being hands on with it and working with the team to get it done. So that entire period I just described to you was 24 months.

Eric Hornung 12:33
Talking about a rocket ship.

Ben Kellie 12:34
Yes. You wanted the rocket ship. I know it was a long answer to a short question. But, but that was the rocket ship. And then from there, I decided I didn’t want to live in a hotel in Florida anymore. I was offered full time work. But I really missed Alaska. And I left. So I left again. I spent two weeks in Scotland with my family, you know, finding myself thinking about what I was going to do with my life. And I just moved to Alaska. I love it here. I love being connected to nature and being out in the woods wilderness. I’m a pilot, I love to fly, I love to hike. And again, you know, six weeks later SpaceX called and now I’m consulting for them. And that’s how the launch company started. It was called k tutor nautics. At the time, we were doing drone services. But that didn’t really pan out and being a business genius. I was like, Well, people are paying us to help solve rocket problems. Maybe we should just do that. So anyway, that’s that’s how Launch co. started.

Eric Hornung 13:26
Before we dive into the launch company. You’re talking about a launch pad. And I kind of realized that I have no idea what a launch pad is. My brain immediately went to like a helicopter pad just a piece of concrete. And then I was like, Oh, no, I’ve seen some NASA things where they have like a big stanchion. So how much of like a launch pad is physical things being built? Whereas like a rocket is like all these little intricate things. You see all these little instruments, all these things being built? How much of a launch pad is things being built versus processes being built and done?

Ben Kellie 13:58
The answer is it depends. It depends on the rocket. So legacy stuff, yeah, you’d have these giant towers out there, you would do what’s called vertical integration, where you stack these sections of the rocket, and it’s all vertical and rolls out like the shuttle did this. Saturn V did this. The SpaceX does what’s called horizontal integration. So they put the rings together, lying down, and then they roll it out and stand it up. And so some of our clients that we work with day to day are launching microsatellites. And so they really do have pretty much a flat concrete pad. And then what we do is we help them design modules that roll out on trucks and service of the rocket for launch. And so it’s really kind of a wide gamut of things. If you’re talking about a vehicle the size of Falcon 9, it’s mostly hardware, but what what powers that hardware and it’s all fixed, you know, it’s 1000s and 1000s of gallons of propellant. What powers that though, is is that process and so it’s probably the classic 80-20 rollover, you know, there, there’s a lot of equipment out there, but what you’re not seeing is all of that detail work that actually makes makes it useful. Make sure everything arrives is in the right place at the right time with the right temperature and pressure to animate it.

Jay Clouse 15:03
When it was the first time you guys were doing this back in like 2012.

Ben Kellie 15:07
Yeah.

Jay Clouse 15:08
And you guys are building this pad. And it’s the first privatized spaceflight project right. At the time,

Ben Kellie 15:15
They had the operation on the cape. So they had been flying off of LC-40 at the Cape, but this is would be the first polar pad and and the first one on Vandenberg. Yeah.

Jay Clouse 15:24
How did you guys get your arms around? What what the hell you were doing there?

Ben Kellie 15:29
Well, I can’t speak for everybody else. For me, it was just living it and breathing it. I mean, it sounds crazy. But essentially, it’s a game of interfaces. So I think this is where like, some software, any general project management person could understand. It’s like, well, something’s gonna come in, and then something has to go out. So like, let’s control that interface and define the hell out of that. And we’ll make the spaghetti in the middle, you know, we’ll mix everything together. And what was great was, I remember in my interview, there was a lot of things where I was like, Well, I don’t know, but here’s what I think or Hey, I don’t know that fact. But here’s how I’ll find out. And I was told later that that was kind of like key, because I like to rescue stuff like no human being would possibly know the answer to every single one of these things, right? And if you did, we wouldn’t trust you. Right. They’re like, we’re more interested, we’re doing things that haven’t been done. And I give talks on like, on this to like, you know, STEM programs, where it’s like, there was not a job for me to train for at an undergrad and grad school at Ohio State that said, like, rocket landing guy or launching person, right? It was it was mechanical engineering, this, what you’re doing is you’re building a toolbox. And so you just you just rely on that toolbox. And you say, well, it’s just mass and, and, you know, they need this temperature, this pressure, this flow rate, whatever. And you end you back calculate it. And I think for me, a lot of the issue was like, what was hard in my head around was like, the interface of the rocket and the actual operations, because that’s out of it was really well to find like, they’re like, hey, we’ve been launching these things out of LC-40. We know what we want to do. We know you know, everything, every commodity, we call them every gas and fuel and propellant piece. And that was heartbreaking, my head wrapped around, and it was really just like going to Texas to the test site, seeing what’s called a mission duty cycle. That was up on the second stage test stand, you know, not that far away from this rocket. And it’s just like full thrust for 180 seconds. And then being in the data room, looking at all that mean, like, oh, like, this is how this works, like just piecing it together. And everybody is very collaborative, right? Because we’re all very cognizant of the fact that we have no idea what we’re doing. And so it’s about not knowing but being super, super interested in finding out in a non theoretical way, not like, Oh, I’m, I’m curious about that. Can I google it, it’s like, I’m curious about that, I’m going to go outside and figure it out.

Jay Clouse 17:38
But let me let me compare this to a recent experience of mine that I think is similar. We wanted to put up and create what is called a board and batten wall in our new bedroom where we have like the whole wall, and you got to put boards across the top, the bottom the sides, you make a grid pattern out of it.

Ben Kellie 17:54
We’re doing this in the nursery, I’m with you.

Jay Clouse 17:56
Okay, and so we wanted these squares to be the same size. But I had a slight miscalculation on both the width and the height. And then I rounded these things to be equal. I’m like, okay, 19 and a half is close enough. We put the boards up, and we see Oh, actually, those things that I rounded resulted in a couple these squares being bigger than the others, smaller stakes, comparatively speaking, but how and how like, important is the math that you’re doing out here on this launching pad for these things that you’re doing?

Ben Kellie 18:27
Yeah, I’m a big fan on the pad, we had more time. And things were a little more understood. I mean, it’s funny to say you have more time when it’s like a 14 month launch from nothing to something. But on the barge, I was a lot more about these, like 10% things. So it’s like, Hey, we don’t know what the problem is going to be like, what is the complicating something actually going to be right? Is it going to be if I put 10 more days into making this air delivery system perfect? Is that the thing? No, probably not. And so it was about triage and things assess. We can’t, I used to always say to people, like, do not fall in love with a problem, because there are plenty more like, and so the answer is that like, kind of my thing that I would do is I spent so much time on the launch pad, doing the math, learning it and then trying to spend time to like actually file that away, such that it becomes you get a feel for it, you get a feel of like, so it was like, Hey, I’m going to run this, you know, schedule 120 pipe over here. I’m going to make it two inches ago, can you make that two inch? I don’t know, like that doesn’t feel right, because what I’ve seen in the past is this would need to be maybe a four inch pipe or, hey, I’m gonna do quarter inch tubing dollars. No, and so you can do less of the of the math that will go back and check it to make sure it’s right, you know, but you can get to the point where you’re you’re just you’re doing so in your case, like instead of saying all the time to do the perfect math and then realizing like oh well the boards or I forgot to account for the actual width of the board. So I was going to the edge and it compounded out as this error. I, you know, I would just put the boards on the wall and be like, oh, cool looks like I can get these up out here and then measure and be like, well, this one’s 17 and a half. And this one’s 18. Okay, it’s probably something three quarters, you know. So it’s about that like failing quickly, up front, when the stakes are low, instead of like, you know, not to pick on your situation, but like, buying materials, cutting all the boards based on some math we did, and then putting it up and be like, well, son of a gun. Now this is right. And so that’s kind of what we did. And and we would do this math. But if it passed the look, right test, we just had to keep going. And, and, you know, a lot of those barges blow blew up anyway. So it was known that nobody was there to see our mistakes.

Eric Hornung 20:40
On the on the things that require precision, how much of it is like, immediately measured with sensors? And then is there like a software interface that you guys use to see I’m so I’m assuming there are so many numbers being spit at you all the time. Is there a standard like in the lunch industry space? Is there some sort of interface that people use?

Ben Kellie 21:02
Yes. So in my day, at SpaceX, everything was coming back. And we were, I won’t tell you specifically what we were using, that’s probably not good. But I will tell you that it is very well known. And it was not built for this application. And so it was just big on on cobbling things together. And now, you know, I’m sure they’ve upgraded and changed a lot of that, but you have 1000s of channels of data coming back, and then it’s no good just to have these data streams come in. It’s like, hey, what does it mean? So we’ve written programs that take those data values, in either it’s a gate where it’s like, hey, this pressure is critical, and it fell below, or it’s like, hey, this pressure, this flow rate in this temperature are all nominal. And so we’re doing calculations and math on that data that comes in to tell us like, Hey, here’s the overall state and health of the system. And we plot those in real time. And we set alarms, you know, because it’s impossible to look at, like 1000s of lines coming in. And so we set alarms around them, and, and those are getting criteria. When we do the math, I should say, like, you always put a margin on it, right. And so then in the case of fluids, we can throttle it down, you know, think about like your garden hose or your kitchen faucet, you’re like, well, it’s got a little too fast, you can throttle down, or we’ll put an orifice in or a regulator for a gas. And that’s how we can kind of fine tune at the end. Because you know, you’re never really to do all the analysis to get it exactly. At that point. It’s like, well, we just wasted six months, like doing the super high end analysis. And because all of the two has one more bin than we thought it would have like was not useful. So there’s a middle ground.

Eric Hornung 22:31
One more question on the general kind of space space, as you called it earlier, who’s the closest person to a rocket when it takes off?

Ben Kellie 22:39
It would probably be, well, if you’re on a US Air Force installation, it’d be the US Air Force and like their range trackers with some of that rain striking ban, or and in second place, who’s you know, just about as close as your lead engineer and red team. So in my case, like we were with the fire department, we’re in fire suits. And we’re like, right on what’s called the quantity distance or QD line, which is this mathematically calculated, you know, like, if this thing blows up and rain shrapnel, you know, you’re outside that line. For Falcon nine, it was about two miles, but it feels a lot closer, when you know, 1.1 million pounds of thrust is going off. And it’s cool. You can feel your chest, everything’s rumbling, you’re standing there in your firefighter gear, which I had no training. They’re like, put on these fireproof pants. I was like, Okay, that was my training. And, and then you like, rush back to site, and you’re putting out fires and stuff? So? Yeah, that’s a really good question. There are some weird old stories of people who like, hit on launch sites in dumpsters and stuff and like, died from the acoustics. So yeah, you don’t want to be much closer, I think than that.

Jay Clouse 23:48
Wow, wow, wow. Okay. Well, to kind of transition us into The Launch Company here in a minute, helped me understand the state of the space space as compared to like, 10 years ago, because we went for forever with it being NASA and that was pretty much all that was happening. How have things changed over the last decade or so?

Ben Kellie 24:09
Yes. So SpaceX was founded in like, 2002. So, you know, yeah. And a lot of those early years, Elon was had a lot of the early years before a period, Elon was trying to like procure an ICBM from Russia. And, you know, like, that was part of the plan. And then they built Falcon 1, and I was not a part of Falcon when I came in, you know, at Reddit about flight two or three, a Falcon 9, so a little so after that, but a lot of my buddies there were, and it’s one of those things where, when NASA and you know, the Soviet Union, were essentially in this race. Everything had to be done. And it had to be what’s called vertically integrated like every single thing I’m gonna say this is done in house, SpaceX, privatized that and you gotta keep in mind that ULA which is United Launch Alliance is the coming together of the two previous dominant players in the space. Essentially, they had, you know, they were private and commercial, but they had a monopoly on the market. So SpaceX came in and said, Well, we see or $300 million launch, we’ll do it for 65 million. And that price difference is just too great not to like take them seriously, because you don’t understand everybody’s very risk averse, like, Well, yeah, but these guys can guarantee it’ll get done this. And so it was, it’s been interesting to see that change. What we’re seeing now that SpaceX has had a lot of success is all these other companies proliferating into that into that area, and in my view, and why we started off companies, because I think that there’s a chance to solve different parts of the value chain and not necessarily have to recreate the wheel every time. I like to joke that if everybody’s out there recreating the wheel, you know, a lot of them are gonna come out octagonal, and then they’re gonna spend $10 million trying to build a suspension system beat up the bumps, and we could just help you have a round wheel from day one. And so that’s kind of how we started. And I believe, you know, while there’s this joke that in history, every great you know, economic evolution is either an unbundling or a re bundling of services, or just going through time re bundling, and unbundling. But we’re trying to say, like, Hey, you all are super, super good at building engines building rockets. But launch doesn’t have to be your core competency. If the three of us, you know, you’ve got these great podcast microphones, if the three of us were like, put 10 years of experience into building these badass, you know, microphones, and we put millions of dollars into design in the field on record research, blah, blah, and then we went down to the port, and we’re finally ready to ship I’m like, we gotta build the boat too. Were like we don’t build boats. And that’s what we’re finding with launch is they’re like, Oh, we built this dope rocket, roll it outside. And like, you know, like the end, it’s like, Whoa, that’s not how this works. So I think that if you want to talk about creating an actual business case for space, that there’s a chance for a lot of these small to medium rockets to have standardization. And that’s where we come in. So that’s, that’s kind of the history of went from government full stack to private full stack. And now we’re seeing people start to open up that value chain and say, Hey, we’re going to be good at this one piece, this one piece. And that’s where real cost savings I think will come from,

Jay Clouse 27:12
What is the growing incentive for a proliferation of people trying to go to space, like what are people trying to privately go to space for?

Ben Kellie 27:19
Yeah, so a number of things, we would say in the small to medium launch range, it’s almost always some constellation receding. So either. For communications, there’s some dedicated satellite companies that are trying to do like internet of things from space, you know, where you can keep track of machinery and equipment and people. There’s also a lot of size packages. So the same way that you know, our cell phones are more powerful than computers of all the size packages that go into satellites can go into what’s called a CubeSat 10 centimeters cube on each side. And that’s one unit, and some of them are one unit, or three unit or six unit big. And they’ll go to a sun synchronous orbit, meaning they’re always in sync with the sun. And so they can image the earth and just slowly sweep around. So if you’re flying a polar orbit, and Earth is turning beneath you, you’re seeing a new new part of the globe as it turns beneath you. And so anyways, have a light of the sun for your imaging. And so we’re seeing a lot of those things happen. There’s satellites that are tracking sea level rise, deforestation, we’re actually seeing like a lot of this imaging and data is super interesting to like, hedge funds, because they’re like doing futures and like looking into different financial things. So there’s all these different applications, and we’re seeing to that as access to space opens up demand is further increasing. So there, it’s we’re, we’re not there yet, I think for the amount of size and things people want to do if the price is right to get there.

Eric Hornung 28:40
So with the like, internet, you can put as much stuff on it as you want. Like every everybody who wants to add something, you just add more stuff. It’s not like there’s a hypothetical or physical limitation on it. But space is very much like a physical place, even though doesn’t feel like it to us. So how much stuff can we put up there?

Ben Kellie 29:00
Okay, so there is a physical cost when you put something on the internet, right? Like, there’s a server somewhere. And so there is some theoretical limit, like if all the land and CMS were I’m not trying to be pedantic, I’m just trying to make a point overall, that like, if the same in space that limit is is smaller. And certainly like already with starlink, you’re seeing astronomers say, Hey, this is impacting our science and our ability. I think, the easy, the easy answer is that you have to have anything that goes up needs to have a deorbit plan of like, how’s it going to come back down, and that’s different, that’s something that’s evolving, you know, we’re all trying to learn and there’s not been this much demand before, to actually choke the sky would take an insane amount of objects. And I don’t think you know, we’re we’re not close to that point right now. But tracking is becoming something that say like AF works, which is the innovation arm of the Air Force is putting a lot of money and time into, and it’s super interested in, as well as like orbital debris mitigation. And so man, we’re always seeing like SBI our Small Business Innovation Research grants. Go into people that are trying to do orbit decluttering. And the only path forward is that as things go up, they have to have a plan to come back down, I could do the look into it. I don’t know if I’m ahead, but it is gonna take a lot to actually fully saturate and shut the sky.

Eric Hornung 30:14
There’s a theory called the Kessler effect that says that once there’s, as more and more stuff goes up into space, the likelihood of a collision between two things increases exponentially. And that would cause more collision. So I was just curious, like, if we are anywhere close to there, and if what you’re doing with standardizing launch and let making launch easier as we have more and more rocket companies sending stuff up in a space is going to accelerate the clutter in space. But it sounds like there’s an industry norm to have a the orbital path of some sort.

Ben Kellie 30:46
Well, we’re working towards that normal. I don’t think it’s there. But yeah, it’s a very real concern. The problem is that there’s certain, you know, it’s not like a mean free path problem, where like, if you, you’re talking about like gas molecules in a room, and what’s the mean free path as you increase the number of molecule, because everybody wants to be in the specific orbital bands, right? And so it’s like, oh, I want to be in Leo, I want to be geo sensing. And so it’s not just like, we can be a cloud of electrons around the Earth, you want to be like in these specific bands. And so that’s what makes it a little more limited, restricted. And the other challenge we’re having is that as you get more access to space, people are disrupting things in the Silicon Valley mindset, and maybe not, you know, being good houseguests all the time. And so yeah, we just are going to see more things getting locked down, and more rules have to be put in place, I think, but I think it is preventable. And I think we can serve all the needs that everybody has, without that becoming an issue.

Eric Hornung 31:39
He talked earlier about creating this round wheel for everybody tactically, how does that look? Is that a consulting service where you pop in and say, here’s how we’re gonna do it? Is it we literally build launchpads? Like, how are you guys making money?

Ben Kellie 31:52
Yeah, great question. So we are a fully bootstrapped company. And it started out as turn the crank consulting. Absolutely. And that was purposeful, because, you know, had we have kids to feed, but also, because it’s a great way to learn. And so we’re doing market research and talking and building relationships and being like, whatever your real problems where you really run into, and then resolving that for them. And we’re like, oh, this is neat. And so if you know, we can solve something for one person, we can solve it for everybody type thing. And so we can, you know, obviously, we’re not violating any IP. If there’s a specific solution for somebody, we keep that in house. But if there’s a more generalized solution that we can spin off at our own at our own cost and development, then we try to do that. So a great example is like our hardware line, the first piece we had is quick disconnects, which are fueling connectors between the rocket and the ground. And when the rocket takes off, they disconnect, and snapshot. And that keeps all the fuel from draining right back out the line. And so we ran into the problem where our clients like, Oh, we can’t find any quick disconnects anywhere. You know, old school aerospace companies will sell them to us. But we call they want $100,000 in what’s called NRE non recoverable engineering costs, and then they want six months to deliver some prototype, then they want to do a review. And it’s like, dude, we’re on. We’re, like, 12 months into an 18 month VC cycle, like, we need something now. And you know, again, I made a joke earlier about being a business genius. I had another one of those moments was like, well, we should just build this. And they’re like, Okay, and so we did, and we build some for a company, they launched, they did it good. And another company called us, and they were like, mad, like, Hey, you build QDs for so and so I was like, Yeah, we did. Well, we need QDs. I was like, great. And they’re like, well, would you sell to us? I was like, yeah. And so anyway, that’s how it happened. And so we’re finding like, also that there’s a bunch of like homebrew solutions in these companies. And we can just be like, hey, doesn’t have to be that way. There’s, there’s an uphill battle. We’re fighting, because so many of the old school supply chain companies for aerospace are like, well, that’s a million dollars because it goes on a rocket and we’re like, Okay, cool. Well, this is 10 grand, and you understand that it has to be qualified. And you’re putting it through the test. And everything needs to be done. They’re like, Yeah, totally. Great. So that’s, that’s kind of the what I would say is the next evolution for us. Those parts have been selected for some really cool stuff that I was hoping to be able to announce by now, but can’t but keep your eyes on the news. I’m really excited about some of the places that these will go. And so anyway, it’s going to be cool. We’re growing, we’re moving it out. So they’ve been selected to do on orbit refueling, which is like a big deal of like servicing satellites. So they’ll demonstrate that it’s late this year, early next year, they’ll go up on I think it’s an electron rocket lab launch, our fittings will be used to transfer a fuel fluid in space, come back down, and then that’ll give us a pathway towards that. There’s a couple other really cool hardware projects off planet that we’re working on. And then the next evolution was building modules. And so at SpaceX on the barge, we built everything and shipping containers. And we just kind of kept that up there. They’re cheap. They’re easy when you want to send them somewhere. There’s never any questions. It’s just like, oh yeah shipping container. Super easy to move through the world of logistics. And so we just shipped we got a few we got a 40 foot shipping container that we’re turning into a mobile fueling module for F22 fighter jets for the Air Force, another 20 foot one for some other mobile fueling for the Air Force. And then we just shipped out a 10 foot container for one of our clients, that is essentially serving as a dummy second stage. So we outfitted it to work just like the second stage of their rocket. So when they test their test site, they can check it all out on this thing, and make sure it all works right before they head out to a real rocket. So we’re we’re building bigger and bigger stuff all the time. And then the next version of that is to build mobile offset modules for rocket companies.

Eric Hornung 35:40
Does this ever feel daunting to you? Like, it feels like everything you’re saying to me is so much bigger than anything I’ve ever done? Or even thought about doing? On both a technical level. But also, you’re literally you just said the word I think out of planet or something like.

Ben Kellie 35:56
Oh yeah, off planet?

Eric Hornung 35:57
Off planet. Do you ever feel like, oh, wow, this is this is big.

Ben Kellie 36:01
I do but in in like an excited way. And I think what grounds us is that it’s it’s the same math and science, like it’s still it’s still physics, we’re still in this in this dimension. And so we have known tools that we can rely on, you know, so like to push for a year ago, right before a lockdown. We moved into this 5000 square foot warehouse, and I was like, Oh, this is where it’s gonna happen. And then we spent a year not being in that warehouse. And it started picking up again in the fall. And again, we’re bootstrapped. Right, so like we couldn’t like call investors be like some more cash, we just had to like piece our way through it. And now it’s full, it’s full of the gills of different hardware projects we’re doing. And I’m like, already thinking about like, Well, can we move somewhere else? Can we go somewhere bigger? And so those are the parts that I think are daunting, but in a good way. And, you know, there was a lot of days at SpaceX where I was, it was daunting, you know, I, I had some some really, really hard days that were like, okay, like, I know, today is gonna suck like the second you wake up, you’re like, this is that day. And I’ve got to get through it. And maybe I only slept three hours the night before. And I think here I just feel like the hardest day I tried to keep things in perspective. Like I had a super hard day yesterday, actually, totally unrelated. I won’t tell the story. But some stuff happened that I was just like, oh, man derail my whole day. And I always say like, the worst day here is still an awesome day, because I’m living in Alaska. Like, I have a great family. And I’m literally doing the thing that I set out to do. So it’s like, whenever like, I’m really tried to spiralling it down, I always just tell myself like, well, this is what you asked for. And why. Yeah, it is what I asked for. This is no. And so yeah, I don’t think I don’t think it dances on the technical side because of the math. But on the other side, like, we’re just living the dream.

Jay Clouse 37:39
I hear you talking about some of these transactions. And it doesn’t sound all that different than why I would expect like a local mechanic looking for parts, or like even a coffee shop that needs like, the cardboard slips on their cups, like it sounds like, Hey, you have the thing we need, we’re gonna buy it, it doesn’t sound like you’re going through these crazy sales cycles. So I want you to tell me if that is if I’m hearing you incorrectly, like how much red tape is there in these transactions? Or is it just a more expensive product in the same type of transaction,

Ben Kellie 38:10
It spans an entirely humongous gamut, right? So like, I just got off the phone. The reason I was a little bit late to this is I just got off the phone with the guy who called me during a panic, they need high six figures of work to start next week. And that was a phone call. And I’m like, great. That’s an awesome phone call. Thank you for calling me. I have also gone through RFP processes. Obviously, I’m not going to say who but we put in an RFP to a client in October. And they’re still deciding if they’re going to do it or not. And they still whoever they pick, they still want to hold the original schedule, which is like rapidly shrinking. And and so that is as a big red tape process for this off planet stuff we’re talking about. That’s a whole other project in seeing narrative, I think we’ve been talking to them for two years, close to it at least a year and a half. And, and it’s coming to fruition. That’s just how it goes. You know, I think with the new space customers, we have a good reputation. And a lot of them are people I worked with previously at SpaceX. It’s a very small industry. It takes forever to build the reputation and a second to kill it. And so that’s where those phone calls can happen. That cool, dude, just do the work with some of the ones that don’t know as well. And maybe you’re a little older school. That’s where the red tape comes in. So yeah, we don’t have a defined sales process. It’s, it can be really challenging.

Eric Hornung 39:23
Is there a SpaceX mafia, like kind of forming Is there like a out of all the new space companies, the rocket companies the is it are most of them coming from SpaceX and Blue Origin or just SpaceX or.

Ben Kellie 39:35
I think on the rocket side? Mostly, yes. A lot of the talent came from SpaceX or Blue Origin or or whatever, like relativity space was founded by Tim Ellis. You know, I’ve done a lot of work for them. He’s a great guy. He spent time at Blue. So like they’re sitting those things. Tom Marcusic runs Fireflys, my time at SpaceX and virgin orbit. Maybe it’s collected I think it was orbit. So the point is, it’s like yeah, it’s, it’s a small community, everybody knows each other. I don’t know if there’s like a SpaceX mafia as much there is a joke that I have an inside joke with, like these people that I worked with at SpaceX for a long time now gone on to other companies, there was like five of us and I laugh. And like, after six years, we still only call it like, there was 6000 people in this company. And we’d like to call each other and be like, Hey, can you solve this? And even though we’re at different companies now, that that’s still there, and we have a name, we have a name for that group that, you know, it’s probably not appropriate to say on air but but is a fun little group. And we all stay really tight. So I think that is forming on the spacecraft side. I don’t think as much I think a lot of it’s coming out of research labs, and they’re seeing or seeded through, like SBI RS and NASA innovation grants and things like that.

Eric Hornung 40:44
Do you feel like the amount of innovation and capital pouring into space is accelerating right now? Or is it just growing?

Ben Kellie 40:52
Dude, it’s back city. It’s wild right now, like everybody and their brother and sister, second cousin twice removed. And it started with the with in electric cars. You know, we saw, we saw that Nikola thing happened. But then you see like Lordstown and all these other ones. And we’re seeing it now in space, you know, momentous Astra have a handful of others spire like or else backing and the amount of capital is crazy. It’s really crazy. Everybody wants to be a part of the next SpaceX and I’ve got in my original share price has gone up. Like I obviously can’t say the exact number. But I mean, it went on the order of magnitude from like, say, 10 to like many hundreds in value per share, right. And so it’s just crazy. I was trying to like jump in into that and have a piece of that.

Jay Clouse 41:36
You mentioned that Launch Company has been totally bootstrapped. With all this funding that’s accelerating into the space, did you look at taking investment.

Ben Kellie 41:44
We did. We have looked at taking investment in in a number of different ways over the years. And actually, we are in the process of being acquired by a majority acquisition from Voyager space holdings, which I’m pumped about, and I’ll talk about a second. But at that time, we had three and I’ll call it three and a half offers on the table to like, get acquired, do the Voyager, buyout, or raise VC. And ultimately, the Voyager thing made a lot of sense to me, because, you know, I think we’re going to create value in the VC realm, like, you know, what would be attracted to them. But what I didn’t like as much was, hey, you’re going to drop everything else you’re doing, and you’re just gonna focus on launches and service. And if that doesn’t work out, like Goodbye, and I’m like, well, this is like a really like, crazy environment right now. I don’t want to be locked into this one thing, like we’re creating value in like seven different areas right now. Right? And boys are

Jay Clouse 42:40
No more hardware. No more QDs.

Ben Kellie 42:42
Exactly. They’re like, no more hardware, no more QDs. Watches the service do or die. No workers, you know, don’t consult teller for stuff calling, like, wow, doesn’t seem smart. And so we learned so much. Yeah. So we ended up turning that down. And I love the group that we were talking to about that, too. It was a hard decision. The other one we were looking at was in DVC, we ended up not going that route. Really love those guys. And Bryce is super cool, but ended up not going that route. And we chose this boys route, because I think they like get it. They’re like, Hey, we’re trying to band together all these different companies cross pollinate ideas and build something bigger and better, right? And so they have all these different pieces they’re trying to play together. And to me, it’s like, Okay, well, this is a new market, like, this is a new opportunity. And nobody knows exactly how it’s actually going to shake. And so if we can all band together and work together to accelerate this, then that makes the most sense to me. And so yeah, we’re doing a majority buyout, give them controlling interest, and then I’ll hold the rest and we’re just gonna keep growing this thing and as crazy what’s on the pipeline for that already through them.

Eric Hornung 43:40
Are there a community of other founders under Voyager that you’ll be kind of interfacing with?

Ben Kellie 43:45
Yeah, so they they purchased Pioneer which is run by Robert Zubrin. He was like he did like some of the first Mars talks with with Elon like, that’s where a lot of that architecture idea came from. So he’s a cool, he’s a cool cat been around a long time, they purchased a friend of ours called altius Space Systems. And then we were the third. Well, we got to be the third. And they snuck in deal they’ve been working on for a super long time, which is Nanoracks, which is, you know, probably not known people outside the industry. But Nanoracks is huge. Like, they have the only commercial airlock on the space station. So if you want to do science on the space station, we have a direct path to that now, right? We’re like, Hey, we want to use the bishop airlock, like, okay, you know, it’s really, really cool. And so we’re talking about post COVID how we can get founders together and kind of build. Yeah, build a little bit of a cohort there.

Jay Clouse 44:30
This is like the re bundling of the unbundling of the verticalization. You’re talking about.

Ben Kellie 44:34
You pretty much Yeah, but what’s cool about this re bundling is its its its horizontal rather than, you know, vertical, right? Like, we’ve got like Orpheus is going to build on space servicing solutions, and we’re helping solve launch and nanoracks like when I was in college, nanoracks was kind of like getting going and they like helped pioneer that CubeSat that is so prevalent today and the launcher for CubeSat. So like they’re kind of the granddaddies in there and so yeah It’s kind of a rebuttal. But in this case, it’s like a horizontal one where we can all figure out how to make value.

Eric Hornung 45:04
When I think about the space industry, I think about Houston, we have a problem. Like I think, Houston, and then I think about Florida, Cape Canaveral, I believe. And you’ve mentioned a couple launch sites. You mentioned Louisiana, you’re in Alaska, is there a hub of like, where all of this space stuff is happening?

Ben Kellie 45:25
Yeah, so LA, is a huge hub for headquarters. Almost all of our clients are based in LA. Seattle has a strong spacecraft, and obviously Blue Origins, you know, in that area, but has a strong spacecraft presence. So a lot of size spacecraft are built there. But then yeah, you talk about launch sites, those tend to be on coasts, so you can get out over the ocean. So that’s, that’s Florida. And then Vandenberg is on the west coast. And people don’t realize, but actually, Alaska has the only actual operational commercial launch port in in the country, and it’s on Kodiak. And that’s where Astro launches from where the DARPA launch challenge went off of, there’s a bunch of more companies, you know, kind of considering that right now. And that’s great for us, because it’s right in the backyard.

Eric Hornung 46:05
What’s it been like building this company in Alaska,

Ben Kellie 46:08
It’s been wild, it’s really great. Because like, I’m from here, and so, you know, I told my friends, like, Hey, I’m gonna, you know, do this thing. And they’re like, okay, you know, and, like, so humbling, so good. They’ve literally could not care less could barely be bothered to look up from the Xbox controller, right? And versus like, you can pretty much make a living in SF and LA, like going to mixers and telling people what you’re going to do and drinking cheap wine, right? Like, read the hype cycle. And so it was really great. Like, there was just days when I woke up, I was like, Oh, yeah, like, I have to actually do it. You know, I can’t just like write the, you know, the endorphins, I got to go. And so I think it’s been really good for that. There’s like a super tight knit cadre of people here kind of based, both within the university and then within this place called the boardroom, which Jays been to the CO working space here of people trying to like help build the economy, you know, we’ve got a resource extraction economy here. It’s not sustainable in any sense of the word. And so I’m really my personal passionate interest is like, building community here to figure out like, what’s next for Alaska? Like, what are we going to do? It’s such a cool place, really geographically interesting from an Arctic point of view. And, yeah, I just love working on those problems. So Washington has been really good. I think, ultimately, or early on, there was some traction, or issues of like, well, how are you going to get up to the launch pad, I’m like, Well, probably take an airplane, you know, I can be there in the morning. And okay, and people started to get it. But frankly, COVID, like, stopped all of that. And we’ve just been able to, like, deliver.

Jay Clouse 47:37
When I was when I was out there visiting you. What was that, like, actual years now?

Ben Kellie 47:43
I think it was like 2018.

Jay Clouse 47:45
Someone was explaining to me how it was actually cheaper to fly into Alaska from other states than to try to fly from like Anchorage, to Juneau. And those like those types of questions about costs and things, you’re talking about sustainability, like, that came up a lot in our conversations and just kind of blew my mind. Usually, when we have founders on the show. We’re talking about like, their city, you know, we talked about Columbus, as opposed to Ohio, you’re talking Alaska very broadly, which is like a huge state. What is the ecosystem like in Alaska? Are there different ecosystems within different cities? Or is it kind of statewide at this point?

Ben Kellie 48:22
I think right now, it’s statewide. Fairbanks has University, Alaska Fairbanks. And that’s a really great research institution. I went there. There’s a space grant program there. There’s actually a suborbital Launchpad there that people come from all over the world to like, launch from the suborbital pad. So there’s a lot of cool stuff, you know, I did, we launched a rocket, we flew on the vomit comment all from programs out of UHF and so I think there’s like a dope little cohort developing there. And then there’s one in Anchorage, but we recognize the need to be inclusive of like more rural areas, because a lot of what we talked about for the next generation, Alaska is like, being fully inclusive across the state and not just having wealth concentrated in like these hubs. And so we’re trying to figure out like, what does the future of work look like for people who may want to work seasonally may not have the best access to internet though maybe startling changes that and work some of those problems and some of those issues. And that, to me is like the next level of like, sticky problem, but where there’s like a huge payoff, like instead of like, Oh, we made some money, and we put some aluminum in space, which is cool, don’t get me wrong. It’s like, Hey, we transformed like an entire economy and gave people opportunity to live where they want to live and do the work that’s meaningful to them, whatever that may be. And that’s like, yeah, that’s a cool problem for me.

Eric Hornung 49:28
Besides space, what other exciting industries are kind of up and coming in Alaska, like in the software space in the tech space and the kind of new emerging businesses space.

Ben Kellie 49:38
Yeah, I’ve spent most of the quarantine I spent just digging into Alexei founder summit, which is like two hours capital really love those cats over there. And I’m trying to help push post COVID like, low code, no code and growing set small SAS Microsoft from Alaska, because you have to figure out like geographically How do you either use it as an advantage or how do you decouple it entirely. using it as an advantage. We have more coasts. And then like the rest of United States combined. And so I really think that oceans are an insane future here. And we’ve got a couple specific accelerators popping up around ocean opportunity, if you’re going to how to feed the world, and how to, like, you know, do all these other really cool things with power generation and transport cold chain logistics. And so I think those are the big things. Of course, tourism has always been here, which is cool. But I’m hopeful that as tourism returns, we can build a plan to have knowledge workers who can be anywhere be like, whoa, wait, I can like literally be in the mountains in 20 minutes, like, I live 90 seconds from the ocean, you know, like, Holy smokes, there’s so much cool stuff going on here. And I can be a part of that. And I can also jump a plane from Anchorage, in the summer and fly over the North Pole to Germany or, you know, fly around the Arctic Circle to Germany, whatever the geography is, and be there faster than if I went from a lot of other places, lower 48, that you can be into Europe quickly. So there’s a lot of a lot of cool stuff that we’re building towards. But right now, it’s we’re watching oil decline, and we’re trying to figure out what we’re going to slot in there to, to make it make it all makes sense.

Jay Clouse 51:01
What about the funding landscape in Alaska? Did you have an opportunity to raise funding for the launch company in Alaska,

Ben Kellie 51:08
We did, we had a number of opportunities, there’s a lot of the behind the scenes work has been building those different tiers, grabbing university students, giving them little stipends, giving them money to like get going, you know, build that cohort up organically. But on the high end, there’s also McKinley Capital Management is running $100 million Nanak fund out of the state of Alaska, that is looking, you know, they’re writing like, minimum, you know, few million dollar checks upwards of, you know, quite a quite a large check size. And they’re super well tied in with a cohort of other investors to do follow on. Their thesis is like, hey, we’ll do anything, but it has to benefit Alaska or be Alaska based company. And that’s really cool. That’s money that came from our sovereign wealth fund, the permanent fund dividend. And so yeah, we’re seeing that start to move and start to happen. They were who we were kind of chatting with about two and a potential VC round, and we love them. And we’ll support them in the future. But I think that they’re Yeah, they’re doing a lot of cool stuff. So there’s, there’s all sorts of landscape for money.

Jay Clouse 52:05
This is awesome. Ben, congrats on the acquisition. I hope you you take it to the moon. If you want people to learn more about the launch company after this or if people want to learn more about the launch company after this. Where should they go?

Ben Kellie 52:15
Thanks Jay. Yeah, we have a website, they may shock you, you can go to www.launch-company.com read all about what we do. I am unfortunately super active on Twitter @northroadben and Washington, he’s on Twitter as well. So yeah, he just knows that.

Jay Clouse 52:33
Eric, do you know what my favorite part about podcast advertisements is? that people actually listen to them. While you read my mind. It’s almost like we’ve done this twice. Now. Yes, that people actually listen to them. Look, you’re listening right now, dear listener,

Eric Hornung 52:45
And me I’m listening too. I’m listening to you, Jay here on the Upside podcast.

Jay Clouse 52:49
And if you have a message that you want to share with the upside audience, people who care about startups, investing the middle of the country, this is a really great place to put that message,

Eric Hornung 52:58
Because people will listen to it. And if you have an event, or you just wanna get something out about your brand, you’re hiring. This is the perfect place for the upside.fm/classifieds. That’s our classified ad that can run on one to five podcast episodes.

Jay Clouse 53:15
That’s right. Typically, we lock in sponsors for longer sponsorships, but we wanted to make this accessible to you and your message. If you have a message to share with our audience, go to upside.fm/classifieds, and get your ad on the airwaves.

Alright, Eric, we just spoke with Ben Kellie, the founder and CEO of The Launch Company. Where do you want to blast off into for this debrief? That hadn’t quite worked.

Eric Hornung 53:45
It really more like a it’s really more like a touchdown Jay, I know you’re not up on in your space puns, but this is definitely more of a touchdown segment

Jay Clouse 53:52
You’re right. Let’s hope we touched down gracefully and don’t explode our podcast landing barge.

Eric Hornung 53:57
I don’t want to explode any part of this podcast, and landing barge. I didn’t even know we had that.

Jay Clouse 54:02
That’s what we’re sitting on right now.

Eric Hornung 54:05
I want to start with the general space industry. I feel like I almost apologize to Ben after we got off the air because I asked so many questions about the industry specifically, that we didn’t take that much into all of the nitty gritty of the Launch Company.

Jay Clouse 54:19
Yeah, totally. I mean, space is a new frontier for us, potentially the final frontier for humans. I don’t know, we’re still calling space the final frontier? Or is it just the next frontier?

Eric Hornung 54:28
I have to imagine that once you get to space, there’s like a new final frontier, like we’ll find something new. And they’ll be like, Oh, yeah, sure, of course, that’s the final frontier.

Jay Clouse 54:37
But that’s got to be like within the space, right? Maybe like time travel would be a new frontier. But even that’s like, an existing frontier. Just in the past. I feel like space is still the final frontier.

Eric Hornung 54:46
I mean, that seems like a very myopic view in the grand scheme of things.

Jay Clouse 54:50
But you’re right, we didn’t know much about the space space. So we spent some time digging into the space space. And I enjoyed that. And I’m not going to apologize, but you’re right. We didn’t get into all the numbers and all the fun stuff with the Launch Company that we could have. However, I have the benefit of having worked with Ben for a couple years now. And so I know a little bit more of that stuff than I typically know about a guest coming in. And I feel like we still got a pretty full look, at least how the company operates, what they’re building, and now into the next phase of their business, mid acquisition with Voyager seems like a pretty exciting time for the Launch Company.

Eric Hornung 55:25
I have something that’s been changing for me from a like plot perspective, for the last, probably two years, when we had Jared on from Moxie, they were doing a lot of consulting on the side, and consulting style revenues. And we’re like, it doesn’t feel like they have the right product yet. And they’re going out, and they’re helping with this. And they’re helping with that. And that’s not a scalable venture, bankable, hey, we’re gonna take this thing on a rocket ship. But I think it’s actually like maybe one of the best ways to startup business, because you get to learn firsthand what all your customers are looking for what they need, and you’re doing, you know, the proverbial do things that don’t scale. So I think when we’re talking about and they started as a pure consulting company, now they have, they’re making products, because that was a need. And I’m doing this because that was a need in the doing this, because that was a need. It’s like, one of those things, maybe it is launched as a service is going to just absolutely take off because it’s starting with a customer centric view.

Jay Clouse 56:20
Take off good use of wordplay there. Yeah, I think this is starting to land for me as well, could be really good customer development and kind of feedback loops. There’s, there’s of course, the caveat of well, the consulting probably needs to be related to something cutting edge that will inform further product decisions. And not just like for a pure revenue basis, at least, if you’re looking at this from a venture scalable model. But I mean, we see this all the time, I see this with digital creators, where it’s like, the services are the economic engine that gave me the time and space to build the products. And I think that works for anybody developing any type of products. But you get to the question of, if I’m a venture capitalist, and this is one of the 10, 20 bucks, I’m going to take this year, and I want to put money into it, I understand that they may be wary of that type of time going into services based revenue.

Eric Hornung 57:13
It feels like this isn’t a moonshot investment. It’s more of like a, sorry, I just laughed on my own pun there. It’s more of like a, hey, people want to go to space is becoming more and more, there’s more and more capital down here. That’s funding the ability to go to space, whether it is the moon or just getting into orbit or Mars or whatever. So what is the next step to that you need to be able to launch off of this planet to get to where you want to go. This feels like one of the selling the picks and shovels in San Francisco selling the Levi’s jeans in San Francisco and not going for gold.

Jay Clouse 57:46
When are we going to change the terminology from moon shot to Mars shot because Mars shot is a fundamentally harder shot to take, right? We’ve already we’ve already reached the moon, we just reach Mars for the first time.

Eric Hornung 57:55
Maybe we just throw it in there as like the Andromeda shot. So that way, it stays relevant for a while I don’t want to get to Mars. And then it’s like, Alright, well, now Jupiter. And then we got to keep on adding and adding let’s just go Andromeda let’s say something really far away. So it stays in the lexicon.

Jay Clouse 58:09
Every time I’ve talked to Ben about this, it just seems so inaccessible to me. Like all these topics, just like blow my mind. And it’s hard for me to understand exactly what he’s going through and building this, it sounds super crazy. But then at the same time, when you listen to him talk, it doesn’t sound that much crazier than anyone else we have on here talking about the buyer of their product, it just seems smaller, as far as like the number of players involved, and higher cost and probably higher stakes too. But it’s kind of normalized for him like he has the same pieces of the value chain. Fundamentally, they’re just different parties.

Eric Hornung 58:48
That was my question to him about does this ever feel daunting? I think he was mentioning that, like, he was on a call with NASA or someone. I’m like, most entrepreneurs and founders are selling to like other small and medium sized businesses to start. They’re not calling up Russian rocket scientists. It’s like a very different type of business to start. And I think stakes is definitely a fair way to think about that.

Jay Clouse 59:13
But also when he talks about like his connections and relationships that he built in the SpaceX days, when these big problems come up. They literally just call him on the phone. Like they’re not scheduling some like large scale conference call or like in person meeting for months out, like, Hey, we have problem, we’re going to call you because you’re an engineer that we trust to help solve this problem. Can you come make this happen? To me that’s even I like that. That’s like that feels like a very natural just kind of sales and problem solving type of space. And you mentioned that some of the older school players are slower to welcome newer entrants into the marketplace, but I kind of like that experience of people just calling you up and saying, Hey, we’re about to launch this rocket. Can you come build the launch site?

Eric Hornung 59:57
Feels like he’s definitely in an inner circle here. How do you think about like funding something like this? Because it doesn’t really feel like a venture style, as we kind of alluded to already have venture style business, but it doesn’t really, where do you go with something like this?

Jay Clouse 1:00:14
Yeah, I don’t know. This is this is where we could have gotten more insight in terms of the number of customers, I think, because it sounds like on a transaction basis, big opportunity for both the cuties and to be using the launch site. But how many people can do that in a calendar year? How many people are trying to do that in a calendar year, because there is still a fundamental limit, if you’re building a multi use launch site? Cool, it’s going to be located in one place, which you know, if I’m launching a rocket, I probably need to build that rocket fairly close by I don’t know if I’m going to truck the rocket across the country to use that. And I don’t know how many people are just doing that. But you have 52 weeks out of the year, how many days a year are you launching rockets out of that site. So these are kind of like unit economics that I didn’t get a lot of insight into talk about. So I’d be curious to know more about how many customers are launching every year, and also, how many customers might be buying things like the QDs and what other hardware is in development right now, that might be able to augment that.

Eric Hornung 1:01:15
So it looks like there’s around 100 to 200 total players in the space, we’re looking at a breakdown of manufacturers of space vehicles, propulsion manufacturers, satellite manufacturers. And within that first manufacturer bucket, there’s cargo transport, vehicles, crew, transport vehicles, launch vehicle manufacturers, landers, rovers, and orbiters. And then research craft and tech demonstrators. So it seems like there’s a lot of different types of customers as well. It’s not just Hey, we’re vertically integrated SpaceX, or Blue Origin or virgin. And we need you to do this thing. But it’s maybe we only make the orbiters or the landers or the rovers. And we still need your help with this piece, because we need to understand how it fits through launch. I don’t, I think to your point, it’s kind of which of those customer segments are they most involved with? And where’s the opportunity to grow it? Or is it just kind of a smattering of who reaches out.

Jay Clouse 1:02:15
It makes me think back to our conversation with Eric of plus one robotics, where he was talking about there really only a handful of like big players here that we really want to work with. And so if you’re going to think about finding this, you’re kind of taking a bet that this is a service that a few big players are going to need. And this is the company that’s going to win out and providing that service. And I can see that given that there’s probably easily like, one hand, the number of people that have the experience that Ben has in building these launch sites. So if you believe that is going to take off to use the word that we keep throwing around here, seems like the right founder to back.

Eric Hornung 1:02:52
Yeah, I would agree with that. That gets us to the founder, specifically, which where we usually start here, but I think you and I both have just about zero reservations on Ben as a founder.

Jay Clouse 1:03:02
Yeah, I’m biased. Personally, I’ve visited Ben in Alaska. And it was amazing. But the dude just works really hard. And he’s very humble. And he’s smart as hell. I mean, if you can build a launchpad that a rocket can take off from and land on, again, in the middle of the ocean, pretty smart. Dude,

Eric Hornung 1:03:21
it seems like space is really heating up in terms of the amount of capital that’s being poured into it. Recently, we’re getting more and more of these kind of satellite manufacturers getting funded, we’re seeing a few venture capital style funds targeting specifically space companies, I think tech stars launch to space accelerator. So I’m going to transition here into what I want to see in the next six to 18 months. And that is a continuation of the number of players in the space industry growing. Because it’s going to make Ben and the launch company, more of an established force, the more people join the space, space, or spin out of Space X. And remember, hey, Launch Company, that’s it, we should use or spin out of Blue Origin or spin out of Virgin. So it’s just thinking through more of how much capital is flowing into space. And how is that converting into more people doing more things in space, because that’s going to lend itself to more launches, to better unit economics and to a better to less of that consolidated thing, that consolidated situation that you mentioned with Eric, if there’s only going to be three players. It’s a nice business, but it’s not. I don’t think it’s as robust.

Jay Clouse 1:04:33
That’s a fun outlook. I’m looking for proliferation, or expansion into the hardware product line, what that looks like, because I think that could be really great business as things proliferate. Even if you know your launch site is in the Pacific Northwest. If there are pieces of hardware that you can develop, to give to other launch sites in different parts of the country. Maybe that’s a profitable thing. I don’t really know to be honest. This whole space is still like pretty elusive to me and pretty inaccessible. But it seems like they have a couple paths forward. And they’re in acquisition right now. So if you would have funded this, maybe you’d be having a nice little exit right now.

Eric Hornung 1:05:13
Jay, blank space Clouse. There you go.

Jay Clouse 1:05:17
I’ve got a blank space, baby. And I’ll right, your name. If you have any thoughts on this episode, or if you have other founders in the space space that we should talk to, we’d love to hear from you. You can tweet at us @upsideFM or you can email us hello@upside.fm. Eric, what else? What other calls to action can we give our audience right now?

Eric Hornung 1:05:37
If you’re listening to this, and you’re in Alaska, and you say, Hey, we should talk to more Alaska companies or I want to launch a podcast that does exactly what upside does, but in Alaska, reach out to us.

Jay Clouse 1:05:51
That’s all for this week. Thanks for listening. We’d love to hear what you think about this episode. So tweet at us @upsideFM or email us Hello@upside.FM and let us know. You can learn more about us and browse our entire back catalogue of episode at upside.fm. And if you love our show, please leave a review on Apple podcast that goes a long way in helping us bring high quality guests to the show.