Hey people! Welcome to Forests Over Trees, a weekly newsletter about tech strategy. We like to zoom-out, connect the dots, and (try to) predict the future. You’ll love it.

This week, we’re going back to space.

A few months ago, we dove into the epic story of India’s landing on the dark side of the moon, what it means for the US-alliance (called Artemis), and how great power competition helps explain the “let’s pick teams” attitude that countries are taking on…

Today, we will put geopolitics aside and look at the categories of companies shaping this new extra-terrestrial world. Let’s go!

To start, we need a framework

Trying to understand and summarize all the companies and industries tackling the “final frontier” is honestly really daunting.

So I cobbled together a framework for how economies developed for prior “frontiers” (i.e. the Americas). We can use history as a guide, then point-out where things will probably happen differently.

Here’s the framework:

1. Exploration & MappingFind things and catalog them to understand the resources and risks of the place.

2. Settlement & InfrastructureMake the place easier to get to, more hospitable, and more scalable.  

3. Resource ExploitationTake advantage of the natural resources and advantages of the place.

4. IndustrializationIntroduce old/existing tech to improve efficiency and raise standards of living. Use R&D to innovate, finding new tech to drive further improvement.

5. SpecializationPush expertise even further in all directions, adding niche services and diversifying the industries that drive the economy.

Kinda interesting, right?

Now, let’s zoom out to talk about how space exploration will be unique.

Space is… different from the Americas

We will follow a different order

First, development in the Americas basically followed these steps in chronological order. But in space… we are skipping some steps.

For example, we don’t have meaningful resource exploitation yet, but we do have super specialized industries that have popped up around satellites. Dozens of firms help manufacture, create software for, and synthesize data from satellites – check out this market map below from A16Z.

We should expect to skip around and loop back through these steps continuously over time.

We can’t learn from the locals

Second, the accelerated development of the Americas was only possible with help from the local people. Side note – obviously, there was huge variety in support/opposition, choice/coercion there.

But in space… we should not expect to get any help.

I’ll be the first to admit that this is well outside my area of expertise – but here’s the space geek game theory I found that seems most logical:

So… help is probably not on the way. We’ll need to spend more time (and be more self-reliant) to get there.

With me so far?

Cool. Now, let’s look at each step in the framework and talk about progress and opportunities.

Exploration & Mapping

We have already made some progress here, but we have a long way to go.

Scientists estimate that of the observable universe, we can map only 5% of it. The remaining 95% is dark matter and dark energy (yet to be understood).

Opportunities:

There are apparently tons of companies (ex. Wyvern, Capella Space) focused on sensing and mapping resources on Earth using satellites from space. But few companies seem to be looking off-earth.

My hunch is that companies aren’t jumping on this because:

1. The monetization opportunities for Earthly data are already well-defined (PE and Hedge Funds will pay a shit-load for small data advantages).

2. There aren’t yet good ways to monetize off-Earth mapping. When space mining takes off, this targeted discovery/exploration work will probably also take off.

When it does heat-up, this discovery work will practically go on forever. The universe is ever-expanding (changing the positions of things) and ever-evolving (changing the things themselves – stars blow up!).

Settlement & Infrastructure

Like I mentioned when introducing the framework, this step is about making space easier to get to, more hospitable, and easier to scale a civilization in.

We have spent a ton of time and money on this step, but it’s been more “busy” than “productive” so far.

Check out the graph below charting how many things we’ve sent into space – and note how it spikes in the last 10 years:

But so far, the largest “civilization” we have off-Earth is the group of 7 people living at the International Space Station (ISS). And because of the geopolitics involved (as discussed last time), the ISS is winding down by 2030…

The silver lining is that getting to space is easier and less costly every day. According to Y Combinator, the cost to reach orbit around Earth has fallen by 10x since SpaceX’s first launch in 2006.

Opportunities:

Let’s start with what’s probably not the best opportunity.

According to a 2023 US International Trade Commission report, SpaceX is responsible for ~45% of global launches, and ~78% of US launches – and those are both growing. Entering the fray while SpaceX gobbles-up launch share does not sound fun.

Instead, startups should be focusing on contributing innovations that improve the quality and length of life in space.

And until the discoverers (see above) come back with stronger candidates for planetary expansion, we will need to basically “roll our own”.

That means either launching space stations (and all the supporting equipment) piece-by-piece into space, or manufacturing them entirely from space.

There are a few “incumbents” here. For example, Axiom and Blue Origin have been around for years, and are among the companies vying for NASA’s approval to the private sector successor to the ISS.

But the variety of designs being proposed for this and other space stations (inflatables, disks, spinning spheres) means that nobody knows exactly what designs will be required. Lots of problems to solve here for eager new upstarts.

Wrapping Up Part 1

That’s all we have time to cover this week. Too much good stuff to share, and I don’t want to overwhelm by sharing it all at once!

Stay tuned for part 2 in a few weeks for the rest of the framework, and where the opportunities are for each of the remaining steps.

Bonus Bullets

Quote of the Week

— US President John F. Kennedy (from a speech in 1962)

Quick News Reactions

• Uber/Lyft Gang-up on Minneapolis – Minneapolis introduced a new minimum pay proposal that seems likely to pass. It would require guaranteed minimum pay for rideshare drivers, so Uber and Lyft are threatening to shut down service in the city. They are probably terrified about the domino effect of other cities following-suit…

• Too Important to Fail – Atos, a huge French IT firm that secures their government’s military communications, has been struggling and almost got bought by Airbus. The French gov is now stepping in to protect it. It’s an interesting twist on “too big to fail” we’ve seen with US banks.

• Great timing, Mark – Literally right after I wrote about this last week, Meta gave a demo of what posting to the fediverse might look like. They seem to be serious about integrating their social apps into it, so this only strengthens my feeling that the fediverse will be a thing.

Overall Economy

This is the Weekly Economic Index published by the Dallas Fed. It’s made up of 10 different data sources from consumer to labor to production, and it’s designed to closely track US GDP.

Tech Equities & Bitcoin

The Nasdaq (blue) closely tracks tech equities, and I added the S&P 500 (green) and Bitcoin (orange) for comparison. Note: this is not investment advice, but it is interesting

Tech Jobs Update

Layoffs from 2022-2024: (Source: Layoffs.FYI).

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