New Hardware – Will Porteous

I’ve been neglecting the blog over the last few months because of some medical issues in my family and a major project for the Dockery Farms Foundation. I’ll have more to say about that project in the weeks ahead, but this morning I’m excited to talk about RRE’s investment in Spaceflight and the launch of its BlackSky Global division.

Spaceflight is executing on many of the trends that we see affecting the satellite industry broadly. After decades of isolation, open systems thinking is finally coming to this industry. For those of us who actively invest in enterprise systems businesses (networking, processing, and storage hardware) it is difficult to fathom the monolithic and proprietary design approach that still persist in most of the satellite industry. The rest of the systems/hardware industry relies on Commodity- Off-The-Shelf components, open architectures and standards and a universe of offshore contract manufacturers. The expense of launch and of operating in the harsh environment of space have been major drivers of this approach, but the willingness to pay of Government and Defense customers has also been a big enabler. This is of course changing as the Government outsources more and more responsibilities to new suppliers. There is no better example of this than SpaceX’s contract to supply the International Space Station.

The most important enabler of this shift to open systems thinking has been increasing access to affordable launch opportunities. This has enabled satellite system designers to think in terms of replenishing the elements of a satellite constellation much more regularly. Once launch is cheap and easily accessible, then satellites become much easier to replace, which opens the door to considerable simplification in the way they are designed.

Spaceflight is deeply rooted in the legacy satellite industry, having developed small satellites for government and defense customers for more than a decade. But the company has also been a leader in increasing access to affordable launch and designing smaller form factor satellites that can still deliver high quality imaging to meet specific customer requests. We invested in CEO Jason Andrews and this extraordinary team in part because they are so deeply rooted in the industry, but also because they are consciously reinventing it. We spent a great deal of time analyzing the imaging market and the business model choices of other companies in the sector. We believe Spaceflight and its BlackSky Global division blends the best of modern systems thinking with a commercial approach that is well tuned to the needs of government and enterprise customers alike. We are delighted to have led the company’s Series B financing alongside our friends at Vulcan Capital, Razor’s Edge, Chugach Alaska Corporation, and Apogee. And we will work with our friend Richard Fade, who also served on the Whiptail Technologies board, any chance we get. Spaceflight is the 3^rd company in RRE’s space portfolio, which also includes Spire and Accion Systems.

Occasionally I will use this space to tell you about a company I really like. It may or may not be an RRE investment; there are lots of things that we like that we don’t get to invest in. Nevertheless, I feel that one of my responsibilities as an investor in this community is to support those companies and teams that I think are doing great work

One such company is goTenna. John Levy, one of the company’s board members, is an old friend and we share a deep belief in what I’ve come to call the New Hardware. I will say more about the New Hardware in an upcoming post. goTenna has created a private, free, peer-to-peer communications network that operates in unlicensed spectrum without any central infrastructure. This network can be used as an alternative channel when you have little to no network coverage, such as in the backcountry, in a crowded concert venue, or in an emergency situation. Or, in a situation where you just want a completely secure private network connection. Most impressive is the way they’ve done it – CEO Daniela Pedromo and her brother and co-founder, Jorge, have put together an incredibly capable small team of hardware hackers and network software developers. They’ve made great choices about what capabilities to build in-house and what they could do with outside partners that know how to work with early-stage companies. And they’ve done it with very little capital. goTenna blew through their pre-sales forecasts and the diversity of their initial customers is striking. I’m excited to see their sales launch later this year.

It’s the kind of clear, focused product effort that we don’t see enough of. goTenna typifies the lightweight approach to product development and go-to market strategy that is critical for today’s hardware companies. I think goTenna is going to do some amazing stuff this year and I encourage you to follow their story.