The iPhone Moment for the Space Industry: Dealing with The Hype around Earth Observation
The iPhone Moment for Data from Space: Dealing with The Hype around Earth Observation
Disclaimer: This article is not a professional write-up or a sponsored blog, but rather the ramblings of an Earth observation evangelist who is passionate about making satellite data more accessible and easy to use to help us better understand our planet and make efficient data-driven business decisions.
In my previous posts, I have largely written about the state of affairs in space tech, specifically, the Earth observation (EO) sector — that data from satellites is really hard to access unlike Netflix for video streaming, why we absolutely need to evangelise EO, whether we can have a Google for satellite data and tried to build an unproven guide for creating a unicorn company in this niche domain. In this final post (for this year), I would like to conclude on a bullish note and give my arguments for why we are going through the iPhone moment for data from space and why we will continue to do so, in the space industry, for the next decade (with a note of caution!).
The iPhone Moment
The iPhone was released in 2007 by Steve Jobs, and the App Store just a few months later, along with a Software Development Kit (SDK) allowing third-party developers to develop new applications that could be released through its App Store. The speciality of the iPhone was not that it was a better phone than what had existed before, an upgraded music player or an advanced camera. It was all of these things put together into one device, allowing developers to develop apps that used the camera, the music player, the location chip and everything else that the phone could offer. This was a pivotal moment in technology innovation, with developers suddenly not having to be restricted in the kind of applications they create. The iPhone Moment, in a way, led to the Android revolution from Google, whose open-source policy, allowed plenty more apps to be developed for mobile phones, most of which followed the “all-in-one device” strategy started by the iPhone, thus democratising the creation of every application we have come to know and essentially, starting the so-called “app-economy”, all of which eventually led to some of these apps eventually becoming unicorn companies.
Why an iPhone Moment for Data from Space?
We are living through a golden age in the space industry — satellites are becoming smaller, launch costs are getting cheaper, and as a result, we are starting to manufacture cheaper, launch faster and collect more and more data about Earth from space. But, whenever I speak to folks living outside the “space bubble”, Earth observation hardly gets a mention. In fact, it is one of the last things on people’s minds when I talk/present about space-tech (see below). Interestingly, I have found that asteroid mining and lunar economy have a bigger hype than Earth observation, among the general audience as well as investors and tech professionals, although their commercial viability is years, if not at least a decade away (more on that below!).
I first came across the term, the “iPhone Moment” in the podcast, Venture Stories, where the discussion was on whether space tech could become the next big thing. Although there was plenty of optimism and excitement around various domains of space including rockets, on-orbit manufacturing, lunar economy and asteroid mining, the consensus was pretty clear. The iPhone Moment for the space industry is happening now, and it is largely because of the data we are collecting from satellites, enabled by cheaper launches and faster satellite manufacturing processes. The multi-billion-dollar potential for the numerous use cases from satellite data makes Earth observation a significant component of space tech that can advance the industry towards the trillion-dollar market.
Similar to how the iPhone enabled the creation of apps for various use cases, data collected from space will enable the creation of different applications. Similar to how the iPhone brought all innovations in one device, satellites are now on the verge of bringing all types of data of our planet into one place. Similar to how the multi-billion app economy was catalysed by the iPhone, we are on the verge of creating multi-billion markets across verticals enabled by data from satellites.
Enough with the big hype? I hear you. Here is how I think we can deal with the big hype, and not let this bubble burst.
The Gartner Hype Cycle
I looked into lots of frameworks to help me deal with the big innovation hypes. Although subject to a lot of criticism over the years, I do enjoy the “Hype Cycle” from Gartner, and I make sure to take a look at their reports every year. I could not find a Hype Cycle for the Earth Observation sector of space, so, I decided to build my own. Here is my summary of how to read and understand the “Hype Cycle” (refer to Gartner for a detailed explanation):
Time: Each innovation progresses through time, over various phases
Expectations: A qualitative measure of expectations in the market for a specific innovation, based on commercial interest and investment in the innovation and visibility in the sector
Innovation Trigger: A technology/product innovation is announced and starts to generate interest
Peak of Inflated Expectations: Expectations reach its maximum and the innovation creates a lot of buzz, sometimes leading to a bubble
Trough of Disillusionment: Some innovations don’t show results commercially — interest wanes and investment dries up (i.e. the bubble bursts, for some)
Slope of Enlightenment: Those innovations that sustained the decline (either through technological advancements or continuing investment) start to show results; more understanding of the commercial feasibility of an innovation
Plateau of Productivity: Mainstream adoption of innovation happens leading to increased commercial value and the promised J curves start to come true
Earth Observation: Dealing with the Hype
I positioned the innovations in the Earth observation sector on the Gartner Hype Cycle. I wouldn’t say that this is an exhaustive list, but it is largely comprehensive of the current innovation trends in the Earth observation sector.
Disclaimer: The analysis is purely qualitative — the “expectations” and “time to reach plateau” predictions are largely based on research around investments and commercial contracts, my experience in the Earth observation sector, consulting stakeholders including professionals in the industry, experts from the space agencies and investors. All criticisms shall be directed towards me. But remember, even the world’s best technology analysts failed in their predictions of the iPhone in 2007, so in reality, you probably shouldn’t take this amateur analyst too seriously!
Innovations and Expectations
Advancements in satellite miniaturisation and reduction in launch costs have meant that different types of payloads could now be developed and flight-tested faster and cheaper than ever before. Meaning we now have the ability to monitor Earth and collect so many different types of data than ever before. From monitoring radio frequency signals (Hawkeye360, Kleos, Unseenlabs) to catch illegal fishing to understanding our weather better using radio occultation signals, from navigation satellites (Spire, GeoOptics). From keeping track of greenhouse gas emissions (GHGSat, Bluefield, MethaneSat) and pinpointing the emitters to keeping an eye on the energy efficiency of the buildings we live and work in (SatelliteVu). From monitoring the spread of wildfires (ConstellR, OroraTech) to enhancing the prediction of crop yields and plant health (ScanWorld). Several hundred satellites from tens of companies (Planet, Maxar, Airbus etc.) are already up in space taking pictures of the planet several times a day, enabling us to gather data even during nights and cloud weather (Capella Space, Iceye, Synspective etc.).
If you follow me on LinkedIn, you might have seen that there are numerous other applications, all of them potentially multi-billion dollar markets, especially if we combine the data from satellites with other sources of data. It is not very different from any other type of software — build SaaS-like applications based on satellite data capitalising the developments in artificial intelligence and data visualisation. Various platforms and marketplaces (Up42, Astraea, Skywatch, Descartes Labs) are coming up to help put together all this data in one place. Data from space is most certainly a compulsory component for helping us solve the biggest challenge of our generation — climate change: from reporting climate risk and insurance risk (Sust Global, Jupiter Intelligence) to reporting ESG data (RSMetrics), which is becoming a norm in the financial services sector. Powered by cloud computing for EO (even attracting the likes of Amazon Web Services, Google Cloud) and Microsoft Azure), Earth observation data can provide ‘insights-from-space’ as a service, for all sorts of verticals — from energy and retail to utilities and agriculture. Observing the Earth from the stratosphere (~50 km) is only going to lead to high-resolution imagery, resulting in better efficiencies for the AI-powered object detection and change monitoring algorithms.
We will probably be even able to capture videos from space (Sen) and observe our planet in real-time. Even better, we could even process all these data in space, thanks to expected developments in edge computing in the next decade, and just beam down the necessary analytics and insights we need, instead of the petabytes of data, like we do today. All of this is incredible. Like the app revolution enabled by the iPhone, data from space can enable a revolution of applications to help us build a sustainable future, to understand our planet and make better business decisions. But what if …
The Bubble Bursts
A lot of innovations pass through the trough of disillusionment and never make it back to the slope. How likely is that some of the innovations mentioned earlier never reach their commercial potential and crash out of the market? Based on the history of technology innovation, quite likely. So, what can we do to minimise them?
Insights, not pixels
As an ex-software engineer, playing with pixels of imagery from satellites has been the coolest thing I have done recently, combining different types of data from space and trying to develop algorithms to automatically spot emissions from factories and training the algorithm to detect building in a packed city (hint: I failed!). This was probably because I am very passionate about Earth observation and the insights we can get out of satellite data. Unfortunately, I don’t think the vast majority of users want to go through this process, except the imagery specialists who love their raster data, geospatial platforms and maps. Sure, satellite imagery is cool, but I have found that more people are ready to give the images likes on social media than there are to spend money on them. Worse, even the pixel lovers find it extremely to acquire satellite data — both at the right price and at the right time. One of the popular ones believes that the current business model of selling pixels is broken. Marketplaces and cloud-enabled platforms may fix that problem for the minority of geospatial users, but the vast majority of data analysts and software engineers need analytics & insights spoonfed to them. I am guessing that they will happily pay, the right price, for something that makes their day job easier and fills a gap that they didn’t know could be solved with data from space. And, of course, unless we commoditise the data, we might not able to leverage all the insights we could, and the iPhone moment will perhaps never come. Perhaps, it is time to focus more on insights and less on pixels.
2. Solve problems using satellite data, not hoping for satellite data to solve some problems
I moved to the space industry a few years ago, and got into the world of Earth observation serendipitously. I am neither an expert in satellite manufacturing, nor a remote sensing scientist. I have neither built a unicorn company in this sector, nor invested capital into companies. But, something that I do know is people start companies is to try and solve problems, hopefully in a commercially viable way, with some level of market pull i.e. customers ready to pay for that solution. Unfortunately, there is a lot of technology push within the Earth observation industry, without any sort of market pull. Several companies develop new technologies and then hope to find problems to solve using technology. Shouldn’t we be starting companies focusing on solving problems first based on the technology? The reality is we are not even sure what the total addressable market is, and the kind of demand that exists for solutions based on satellite data. In fact, the solutions created are just being matched to solve potential problems. In other words, the innovations are being made to wait for its magical billion-dollar market, instead of actually going and competing for the share of the pie. More often than not, this solution-based on-problem approach is only valid in the defence and security market, which has been in the plateau of productivity phase, for decades and will continue to be. So, if we do need to cross the chasm, we probably need to go out, talk to the paying customers and develop solutions to solve problems, probably with a vertical-centric approach.
3. Evangelise and democratise
Let’s be honest, even if we have figured out the challenges in licensing, distributing and pricing satellite data, focused on solving specific problems in verticals and emphasised selling insights than pixels, this technology is still not something people outside the “ bubble” easily understand. Apple heavily evangelised the Mac to developers — it was the first graphical user interface ever developed with applications, differing so much from the earlier command-based computers. To start the app ecosystem, Apple developed the SDK and made it extremely easy for developers to write code and publish it on their App Store (ok, Android made it easier!). This created a whole job profile in the world — app developers, who still kind of rule the job market, along with data analysts and software engineers. This was all possible because Apple and Google decided to play the long-term game, opened up their technology and evangelised their app ecosystems. So, there is no use if we actively evangelise our innovation and do great marketing while the actual data is locked up somewhere accessible only through complicated licensing, distributing and pricing. If we want this to be our iPhone moment, we might want to focus on value creation in the application layer, than on the data and platform layers, allowing for actual democratisation of the data.
Do I really think all the innovations will make it past the trough of disillusionment? No, but I hope that they do in some form or the other. I am not a pessimist, in fact, I am quite the opposite. I switched careers into the space industry because I am sincerely passionate and excited about the potential of applications of space technologies. The dreamer inside me believes that Earth observation data will definitely unlock multiple multi-billion-dollar markets across verticals, traversing throughout the value chain with benefits becoming harder to quantify — similar to how data from navigation satellites have become the core of the app economy. Just like how the unicorns of the past decade— Uber, Instacart and Tinder etc. — are not considered space-tech companies (but still heavily rely on space technologies), I believe the unicorns of the next decade will start to rely on Earth observation data based on some of the innovations mentioned above. We just need to make sure we do not slide through the trough and let the bubble burst. I am convinced that we are passing through the iPhone moment for Earth observation and the space industry in general. If you are curious about what will be my part, please watch this space for some updates in the new year.
I started the “Hype Cycle” analysis as a personal research activity, and somehow I ended up doing the exercise for the overall space industry. I really do believe that this iPhone moment is going to continue for the next few decades, as we continue working on the innovations across the space industry. I may or may not a post on this in the new year. But I just wanted to leave it here, for your feedback and comments during the holiday period. As mentioned before, even the world’s best technology analysts failed in their predictions of the iPhone in 2007, so in reality, you probably shouldn’t take this amateur analyst too seriously!