If you're reading this, you probably have the sneaking suspicion that something big is on the horizon. You may even have glimpsed a harbinger of this coming change: small, low‐Earth orbit (LEO) satellites swooping across the sky, parts of the rapidly growing satellite constellations powering the global economy to a greater extent each day.

We use the term Space Economy to encompass every business that relies on orbital access to deliver its value, from Planet Labs,* a company imaging every inch of the ground from space on a daily basis, to Pokémon GO, a hit mobile game that works using GPS signals from satellites.

(An asterisk will mark the first appearance of any company Space Capital has previously invested in.)

For all the media coverage of SpaceX* and its iconoclastic founder, Elon Musk, commercial launch services are just the beginning of the story. The Space Economy is much more than rockets and satellite hardware. Space‐based technologies are next‐generation digital infrastructure, the “invisible backbone” of the largest global industries. Most people have yet to grasp the genuine, world‐changing business implications of lower‐cost orbital access. CNBC has called space “Wall Street's next trillion‐dollar industry.”¹ Bank of America predicts that “the growing space economy will more than triple in size in the next decade to become a $1.4 trillion market.”² Morgan Stanley expects a space‐based business to create the world's first trillionaire.³

Humanity has operated in space for decades, but, for reasons covered in Chapter 1, only recently has space become a category for investment. Given that this entrepreneurial space age is only a decade old, most of the action is still in the private markets, but we're beginning to see some companies listed on public markets where retail investors can participate. If you think back to the late 1990s, there were a handful of publicly traded technology stocks. Seemingly overnight, “technology” became an investable category to diversify your portfolio. Today, that label has lost its meaning. Every company is a technology company. Space is in the same position that tech was then. One day, “space” as a label will lose its usefulness as every company begins to rely on space‐based technology in some way to deliver value.

Space technologies have already delivered massive returns for investors. GPS is a space‐based technology that has generated trillions of dollars in economic value, as well as some of the largest venture outcomes in history. As we'll see in Chapter 1, GPS provides a useful playbook for understanding how other space‐based technologies will create new investment opportunities across the economy. Two of these—Geospatial Intelligence and Satellite Communications—already play critical roles in most major industries, including agriculture, logistics, telecom, and financial services.

There was a time when terms like “e‐commerce” and “blog” began appearing regularly in magazines and nightly news shows. At the time, these bits of unfamiliar lingo were whimsical curiosities to the mainstream, newfangled phenomena relevant to teens, scientists, oddballs, and geeks but of only momentary interest to everyone else. How soon the internet changed things—as much for magazines and news shows as for every other business. Few people understood the scope of that onrushing change, let alone how to harness its potential. Of those who did, you know more than a handful, from Reid Hoffman (Netflix) to Jeff Bezos (Amazon) to, once again, Elon Musk (PayPal).

Chances are a warning bell has been going off in your mind about all the recent interest and activity in space. While you may know something noteworthy is happening, the full implications are still hard to see. This book will give you the lens you need.

Let's say you're a serial entrepreneur, or that you're entertaining the notion of starting something of your own. As a founder, why risk entrepreneurship if you're not going to shoot, literally, for the Moon? Or, at least, in that general direction? Even if you already see the opportunity in this rapidly growing market, however, you have questions: For all the investment capital flooding into the Space Economy, is there any interest in what I can offer? Do I have the necessary qualifications? Do I need a background in avionics or engineering? Should I have worked at NASA first? Will I need to bring a personal fortune to the table, as Elon Musk did with his proceeds from selling PayPal?

The answer to all these questions is a resounding no, but these concerns and others will be addressed in detail here.

Likewise, you may be an investor curious about the potential of these new businesses and industries but unsure how to measure their value—or weigh their risks. How much of this stuff is really happening, as in, likely to turn a profit over the next few years? And which of these new businesses are still Star Trek, not 60 Minutes, despite the assurances of scientists and entrepreneurs? Investors have heard a lot of hype from space “experts” over the last few years. This book will help you separate fact from science fiction.

We're at an inflection point. What's actually happening in space is more astonishing and otherworldly than all the breathless promises of the space crazies, the wild‐eyed talking heads who keep promising a Starbucks on Mars by early next year. Fifty years ago, the first glimmers of a global computer network containing all the world's knowledge attracted scant public interest. Meanwhile, jetpacks inspired awe and wonder even though people regularly flew on airplanes. Would jetpacks really have been more important than the World Wide Web? Of course not. To the average person in 1973, however, jetpacks were easier to understand. The same goes for the genuine potential of today's Space Economy. It's more difficult to grasp than the idea of a Mars‐based latte, but it's well worth the effort of doing so.

To succeed as an investor in any category, you need to understand not only fundamentals like profit and loss but also the lay of the land where you plan to allocate your resources: the companies and their customers. The markets and the major players. Consider this book your manual and your map. As investors and operators, the team at Space Capital brings a unique combination of in‐house technical expertise, entrepreneurial experience, and an investment track record to the table. There is no predicting the future, but some guesses are far more grounded than others. Read on for ours.

If you're not an entrepreneur or an investor yourself, you may be a professional seeking a role in the Space Economy. In fact, you may already be working in a space‐related industry, anywhere from incumbent defense contractors to new heavyweights like SpaceX and Planet Labs to one of the many space startups that have been founded over the last few years alone. As a leader, manager, or frontline employee, you will find a wealth of valuable information here, including lessons and advice from CEOs, veteran space industry professionals, space policy experts, visionary technologists, and more. The diversity of perspectives this book provides will give you an unparalleled look at the big picture, along with many actionable takeaways.

***

Here I go, making big promises about the future, just like all those people preselling caffeine on the Red Planet. Why take my word on any of this?

After managing a $50‐billion real estate portfolio through the Great Recession, I decided to seek a greater purpose than investment banking. I wanted to make a genuine, lasting impact on the world. Drawn by its Skoll Center for Social Entrepreneurship, I went to Oxford University to earn my MBA at the Saïd Business School. There, I had the opportunity to learn from the brilliant economic sociologist Marc Ventresca.

Ventresca, an authority on technological innovation and market formation, taught me all about the nascent markets that spring up from innovative breakthroughs like the car, the PC, and the mobile phone. In Ventresca's class, I learned what nascent markets look like and how they evolve. Just before I matriculated at Oxford, on May 24, 2012, SpaceX had successfully delivered cargo to the International Space Station (ISS) aboard its Dragon capsule, a first in commercial spaceflight. It would be hard to imagine a more fortuitous piece of serendipity: Learning about market formation, I could see recent evidence of the birth of a bona fide new market.

By successfully completing its ISS cargo mission, SpaceX had done the unthinkable, achieving a feat previously restricted to three world superpowers. Where things went next seemed obvious to me. Market competition would increase efficiency and decrease prices. More and more businesses would be able to participate in the Space Economy. All kinds of unforeseen products and services would crop up. Fortunes would be made (and lost).

At the time, I felt certain I couldn't be the only person who saw a market forming. SpaceX wasn't operating in secret, after all. Musk delighted in trumpeting every milestone on social media. As early as 2003, he declared an unambiguous parallel between space and the internet: “I like to be involved in things that change the world. The Internet did, and space will probably be more responsible for changing the world than anything else.”⁴ Here was a serious tech entrepreneur telling everyone that outer space was “where the future is.” Surely, now that Musk had delivered on the promise of an ISS cargo mission, entrepreneurs and venture capitalists around the world would scramble to leverage affordable orbital access. I'd have to work quickly if I wanted to participate.

Recognizing that all the new space startups I envisioned would need venture capital, I decided to start an early‐stage investment fund specializing in the category. To be successful in such a deeply technical field, however, my background in finance wouldn't be enough. So, as a first step, I sent a cold outreach email to the CEO of Astrobotic,* a Pittsburgh‐based space‐robotics company making progress toward Google's now‐defunct Lunar XPRIZE. In my email, I offered to help Astrobotic develop a market assessment for commercial lunar transportation services, pro bono. Astrobotic agreed, and I spent the next nine months working closely with them to study the emerging opportunities around Lunar transportation and infrastructure.

This was my first experience working within the Space Economy itself, interacting not only with the team at Astrobotic but also with other leaders in the field. To my surprise, I found that nearly everyone working in the Space Economy (as I'd already begun to think of it) was either an engineer or a scientist. There were no MBAs and very few general entrepreneurs. Maybe there was room for me after all.

The report I ended up writing, the first assessment of its kind, generated attention for Astrobotic, which even used it to pitch NASA. (Though the Lunar XPRIZE ended after a decade without a winner, Astrobotic went on to win hundreds of millions of dollars in Commercial Lunar Payload Services contracts and is due to send its Peregrine lander to the Moon aboard United Launch Alliance's Vulcan Centaur rocket by the end of 2022.⁵) Meanwhile, in exchange for my contribution, I received an invaluable understanding of this new market.

After Oxford, I published several academic papers on related topics. One explored the ramifications of the ISS cargo run, explaining how public–private partnerships had made commercial spaceflight economically feasible and arguing for the real, near‐term economic potential of space technologies.

“The docking of Dragon represented a historic moment where a commercial enterprise managed to achieve that which had previously only been accomplished by governments,” the paper read.⁶ What I'd written went on to be cited widely, but I was just getting started. There's a difference between research and application, and I wasn't just studying the Space Economy. I wanted to help build it.

In 2013, there was close to zero private activity or investment in the Space Economy outside of SpaceX. Despite my sense of urgency, I seemed to be one of the few people on the business and investment side who saw this as an opportunity. (In Chapter 6, we'll look at the troubled history of the commercial space industry and how prior failures led many to miss the turnaround when it finally happened.)

Without enough deal flow or investor interest to support a fund, I helped stand up an innovation center focused on the commercialization of the United Kingdom's space sector. At the Satellite Applications Catapult, I incubated and accelerated startups and mobilized investment in space businesses. Working at the Catapult, I built my professional network and cultivated a reputation within the field. At night—work hours back on the East Coast—I built Space Capital. Lacking sufficient capital to invest, I leveraged my expertise and the unique data set I'd gathered to educate and inform the market, combat misconceptions, and help investors understand where things might be headed.

By 2015, I had enough momentum to raise seed capital. Moving to New York City, I established Space Capital's headquarters and, in April of that year, launched our inaugural SPV (special purpose vehicle) fund, collecting money from groups of individuals to, at first, invest in Planet Labs. These weren't blind pools of venture capital. They were funds I'd cobbled together myself, deal by deal. I'd find an opportunity, do the due diligence, and bring it to the investors directly.

That December, SpaceX achieved a successful landing and recovery of their rocket, ushering in greater reusability and further reducing the cost of reaching orbit. This feat catalyzed sufficient investor interest to launch Space Capital's first institutional venture capital fund in 2016. At that point, I knew it was time to bring in a partner. I needed someone who would complement my finance background with heavy‐duty industry experience and technical expertise. Unfortunately, I found that many of the people visibly operating at the intersection of space and business were … overly enthusiastic. Or, to put it bluntly, hucksters. Venture capital is a reputation business. I couldn't afford to associate myself with a snake‐oil seller. I needed to ally with a serious businessperson with a deep background in space. Making a list of candidates, it soon became clear that Tom Ingersoll was the person I needed to meet.

At the time, Ingersoll had been advising blue‐chip venture capital funds on commercial space opportunities. As a CEO, he had already led two successful exits of venture‐backed space businesses, making him one of the most accomplished operators in the Space Economy. As an engineer and entrepreneur, Ingersoll had an impeccable pedigree, vast industry experience, and enough expertise on the investing side to meet me halfway. You can imagine my delight when he agreed to join Space Capital as my fellow managing partner.

Tom Ingersoll started his career with a decade‐long stint in the Phantom Works advanced prototyping division of McDonnell Douglas, the legendary aerospace company that eventually merged with Boeing. There, Tom worked with Apollo astronaut Pete Conrad on several key projects, including the Delta Clipper Experimental (DC‐X), a reusable single‐stage‐to‐orbit launch vehicle.

In 1996, Tom co‐founded Universal Space Lines with Pete Conrad, T. K. Mattingly, and Bruce McCaw. Ahead of its time but with a grand vision to become an operating company for the burgeoning commercial space industry, Universal Space Lines founded two subsidiaries: Universal Space Network, a provider of commercial tracking, telemetry, and control services for spacecraft, and Rocket Development Company, a commercial launch company.

A decade later, Ingersoll, with the help of McCaw, led the sale of Universal Space Network in one of the earliest successful exits in the Space Economy. (Now a subsidiary of Swedish Space Corporation, the network Ingersoll helped build has been instrumental in scientific missions in both LEO and Lunar orbit, as well as for commercial satellite services like Sirius XM.)

Next, Ingersoll was brought in to lead Skybox Imaging, a company developing satellites to provide frequent, reliable, high‐resolution imagery of the Earth. In 2014, he led the sale of Skybox to Google for $500 million in one of the largest venture‐backed exits in the Space Economy at the time. (Skybox was later acquired by Planet Labs, where its assets are a key revenue driver.)

With the sale of Skybox behind him, Ingersoll stepped back for a look at the overall landscape. While more investment capital was flowing into commercial space efforts than ever before, too much of it was heading into “the wrong places.” That's why the timing couldn't have been better when I reached out to him about Space Capital.

“People were making claims they couldn't achieve,” Ingersoll told me. “It wasn't healthy for the investment environment. It made me nervous. Space Capital was a way I could make a difference by steering money away from the space crazies. If people aren't making money in space, capital will dry up.”

Today, Ingersoll believes the space‐crazy tide has turned: “Things are absolutely going in the right direction. There's froth, and some bad investments are always made, but we're on a great trajectory in general. There are better insights. There are more serious investors entering the picture.”

Soliciting Tom Ingersoll's participation in Space Capital has easily been one of the best decisions I've made with the firm. There are few people on the planet with his soup‐to‐nuts technical and operational experience in the commercial space industry. Few but him have brought not only spacecraft but entire space businesses from seed to success not once but several times. Tom's expertise and intelligence are an invaluable part of Space Capital's value proposition, and I count myself lucky to call him my partner. Without a doubt, it's the talent we've assembled that explains why top‐tier venture capital and private equity firms consistently look to us for operational guidance.

At Space Capital, we are experienced fund managers and operators, deeply embedded in the Space community, with a strong technical understanding. Our partners have built rockets, satellites, and operating systems. We have founded companies with assets currently in space and have led multiple exits as operators. We have been investing in this category for over a decade, and top‐tier venture capital and private equity firms have consistently looked to our partners for operational guidance. As thesis‐driven investors, we attract the best founders, ask better questions, and make better decisions.

You may wonder why a company that trades on its expertise would share its knowledge in a book. As I said earlier, before I had a cent of capital to invest, I used my expertise in the Space Economy to educate and inform the broader market. Investor education is still an integral part of our strategy. This book joins a wide array of Space Capital white papers, blog posts, podcast episodes, and television appearances. As investors, we believe that, for all the activity in today's Space Economy, the world is nowhere close to fully embracing the exponential growth opportunity at hand. With orbital access for all within reach, there are so many ideas and innovations from other industries that can now be applied to space. In spreading our insights, we hope to spur greater participation in the Space Economy by the most talented entrepreneurs, investors, and professionals.

Over a quarter of a trillion dollars has been invested into nearly two thousand unique space companies over the past decade alone. Simultaneously, public interest in space‐related careers has surged: Space Talent, our space‐focused talent community and job board, currently lists 30,000 open positions across 700 companies. The Space Economy is here, and its growth is trending almost straight up.

As of this writing, orbital launches are on a record pace for the year, led by SpaceX and China's state‐run launch operators. There were 72 launches in the first half of 2022. If that pace continues, we will break the record of 135 successful orbital launches set in 2021.⁷ Much is happening, but if you rely on mainstream news that touches on space and space‐based technology, it's easy to miss the forest for the trees. Stories that touch a nerve generate clicks. As we've seen across the media landscape, this distorts the picture.

Some businesses in the Space Economy are making real progress toward genuine and lasting improvements to our quality of life, from reducing pollution to ensuring our food supply, but they're succeeding in ways that are hard to summarize for a general audience. Other businesses wow a gullible press with flashy and dramatic promises but pursue approaches that aren't grounded in good science.

It's a complex and powerful story like this one that demands a book‐length treatment. The Space Economy isn't something you'll understand from reading the latest headlines. It's too easy to confuse recency with relevance. Keeping up with space‐related posts on the tech blogs alone won't clue you into what's really going on. To understand today's Space Economy, you need a balanced, fact‐based perspective with enough context to understand the implications.

At Space Capital, my partners and I spend most of our time talking to companies about their goals. Crucially, however, we follow up by doing our homework. We validate assumptions and estimate odds based on the facts. The reason we've been so successful is that we have the requisite expertise and investment experience to dig deeply into even the most technologically ambitious entrepreneurial vision.

At Space Capital, we know most of the key figures operating within today's Space Economy. Over the years, we've talked shop with many of the leaders, government officials, technologists, and innovators driving progress in space, and I have also conducted a series of dedicated interviews specifically for this book. Backed by these incredible outside contributions, I feel confident that The Space Economy will stand for some time as the most comprehensive and authoritative look at this exciting field.

***

The book is comprised of 10 chapters, each of which is designed to stand alone as a comprehensive resource on one or more key facets of the Space Economy.

The first chapter defines the Space Economy lens and makes the case that space is about much more than just rockets and satellites. As you'll see, the next‐generation digital infrastructure provided by satellites is becoming part of the foundation on which every part of our economy—retail, shipping, manufacturing, everything—depends, unlocking a universe of new possibilities and changing the world in profound ways.

Chapter 2 offers a map of today's Space Economy, explaining the different categories we've identified and highlighting some of the key players. One of the most interesting things about the Space Economy is just how much incredible innovation is going on outside the spotlight. Companies are already finding product‐market fit and generating tremendous amounts of value in this arena, and my hope is that a better understanding of the playing field will help you understand where you might make your own contribution.

Chapters 3, 4, and 5 offer targeted advice for founders, managers, and leaders of companies within the Space Economy. Whether you're an entrepreneur toying with an idea that relies on space‐based technology like GPS, the leader of a small but growing application developer using Earth Observation (EO) data in novel ways, or the CEO of a satellite manufacturer on the verge of an IPO, you will find valuable advice here from an array of major figures in the field combined with our own observations, insights, and best practices at Space Capital.

The Space Economy is unusual in how closely it interfaces with government organizations and policymakers. In addition to an in‐depth exploration of the evolution at NASA that led to the success of SpaceX and the birth of the Space Economy, Chapter 6 offers an insider look at the current rules around space and how they are likely to evolve in the near future. If your company operates in space or plans to do so, this chapter is required reading.

Chapter 7 offers practical guidance and useful insights on separating fact from fiction when it comes to space‐based tech and making the best possible use of your funds to generate robust, resilient, long‐term growth in any portfolio with a space‐aware investment philosophy.

If the idea of working within the Space Economy excites you, you're in luck. The opportunities go far beyond specialized areas like physics and engineering. In Chapter 8, I walk through the most in‐demand skills, traits, and attributes of space professionals and offer guidance on pursuing the most promising career paths. There's room for everybody, and best of all, the Space Economy will be incredibly resistant to downturns.

In the aftermath of COVID‐19 and the Great Resignation, talent has become the most pressing challenge for nearly every organization. This is doubly true within the Space Economy, where the competition for talent is even fiercer than in the tech industry as a whole. On the bright side, great employees are drawn to ambitious companies with inspiring missions. Space Economy businesses are the most ambitious on the planet. In Chapter 9, I cover what the smartest organizations are doing to attract, develop, and retain world‐class talent.

Most of this book is devoted to the here and now: the Space Economy as it currently stands and the opportunities waiting for anyone smart and ambitious enough to seize them. That said, there is value in looking a little further ahead, in this case at the Emerging Industries of the Space Economy. Lunar bases and crewed missions to Mars really aren't as far off as you might think, and those possibilities represent just a fraction of the potential that some very smart and highly pragmatic leaders have in mind for the next few decades. In Chapter 10, I offer a down‐to‐earth, hype‐free, reality‐based overview of what is likely to come next, as well as a look at the far‐fetched ideas you can safely dismiss as highly improbable. I'll also look at two existential threats—climate change and military conflict—and explore the dangers and, more important, hopes offered by the Space Economy.

In highlighting the exciting potential of the Space Economy to change the world for the better, my hope is that people on both sides of every political divide can come together and work toward a vision for a healthier and more resilient world. Elon Musk may be planning humanity's exit strategy via Mars, but until then, there's plenty worth saving here on Earth. We finally have tools that offer the promise of a way forward.

It's with all this in mind that I call this the most important book you can be reading right now. The Space Economy will serve as a crucial primer for understanding where things are really headed—not just in the United States, not just across the satellite industry, but throughout the economy as a whole—and positioning yourself within it as an investor, an entrepreneur, or a career professional.

Wherever you stand, this story affects you. Are you going to learn more about this new reality and seize the opportunity for all it's worth? Or will you play it “safe” and stick your head in the sand? A new world isn't just coming. It's literally on the launchpad. Take‐off is imminent. Are you ready to board?