Recent startups in Silicon Valley

Skybox Imaging, another startup, makes its systems, which are the size of dorm refrigerators, “from scratch” in two years at a total cost of $15 million. Nanosatisfi, located down the street, took less than a year and approximately $106, 000 (raised from a crowdfunding site) to make its satellites. In comparison, LCROSS – NASA’s “low cost” mission to the moon in 2009 – took 29 months and cost $79 million, a sum that equals several years’ operational expenses for startups.

The Right Picture At The Right Time

In a recent TED talk, Chris Boshuizen, chief technical officer at Planet Labs, pointed out that some images in popular applications, such as Google Earth, are as old as ten years. This affects the increasingly complex and competitive nature of business intelligence, a field that draws from various sources.

Dan Berkenstock, chief product officer and co-founder at SkyBox Imaging, says the business value of space imaging startups is about the right picture at the right time. “The market has moved from image scientists to consumers (and businesses) around the world, ” he says. For example, Big Box retailers can use satellite images to correlate parking lot attendance with store footfalls. Energy companies can use the service to monitor pipelines in remote and inaccessible locations. Similarly, non-governmental organizations use the technology to track deforestation.

A Complicated Industry

The earth imaging industry is predicted to be worth billion by 2021. The good news, however, is long overdue as the industry was deregulated back in 1991. But, the expected surge of innovation failed to materialize. In fact, there was little to recommend the industry to startups, until recently. This was due to two reasons: complex development processes and unattractive economics.

From base station design to attitude determination software, satellite development is a highly technical and multidisciplinary affair. Government agencies such as NASA retain strict control over all processes. This vertical approach inflates costs, promotes bureaucracy, and extends project timelines.

As an example, Walter Scott, chief executive officer at Digital Globe and a pioneer in the private space, says launch costs form a substantial chunk of development costs. “It was a vicious cycle, ” he says, referring to the cycle of high launch costs feeding into high development costs when he launched his company.