Space Business Podcast #85 Egbert Jan van der Veen, OHB

Five, four, three, two, one, zero, all engine run, ripped off, we have a lift off. A Space Enthusiasts, my guest this week is the Head of Strategy, a well-known, publicly listed German Space Company, OHB, Eckbert Jan Wunderwein. He's also the head of their corporate venture capital arm, which has invested in the number of well-known space companies, including some that have been on this podcast. So he has a really good view of the space sector in general and also specifically about what is going on with space startups. Enjoy! By the way, happy Thanksgiving's holiday to our many listeners in the United States. My name is Rafael Rodkin and I'm an investor in advisor to space companies. Just as a reminder, this podcast is for informational purposes only and nothing should be taken as investment advice. This podcast is sponsored by NanoAvionics, a satellite manufacturer and mission integrator. Their technology has enabled many space companies worldwide to offer services that improve life right here on Earth, such as providing global connectivity, conducting growth observation, or contributing to scientific discoveries. Check them out and also check out my episode with their CEO and co-founder. Sadly, I am not a rocket scientist, but I am an alumnus of the International Space University. ISU offers a number of educational programs about space worldwide. Check them out at isunad.edu. And just some final things before we start the episode about ourselves. If you enjoy the podcast, please leave us a five-star rating on your favorite podcast platform, such as Apple or Spotify. If you want us help expand our work, you can do so and support us at www.patrion.com/spacebusinesspodcast and we'll also put that link in the episode notes. And lastly, you can follow us on Twitter @podcast_space. Yeah, sure. So my name is Eckbert. I'm working in space since 14, 15 years right now. My background is more into technology and innovation management. I did a study on industrial engineering and management. And then basically, I kind of rolled into the space sector by chance. It was not a lot. I didn't really study anything like that. When I was a child, I was very much enthusiastic about space. I went to the space expo in Nordwag when it was very young and I got the early flavor there. I never really thought I could work in that. And then I just kind of rolled into it. And basically, the technology innovation for a long time with the DLR and then also at AVGB, it was responsible for all technology and innovation development there for all the coordination of those activities for about six or seven years. And since four years, my official role is head of strategy for HB, which means that all the future development for our company, where do we go in the future? What is our strategic plan? Part of that is also corporate development, so the development of a new area, the integration of several companies within each other, the skills of companies as well. We have not yet so far, but we have only acquired so far, but it could be part of it. And then I have a small little hobby on this side, which is taking ridiculously a lot of my time more than it should normally, but there's engine capital. Indirector for the OJP Venture Capital, which is just a strategic corporate venture capital arm of the OJP group. That's a nice hobby to have. But let's start at the beginning of some of the things you said, you said you brought into space by chance. Could you just expand a little bit on that? I'm just asking because I think there's more and more people who are not yet in space, but they're interested to get into space. So this kind of story is interesting to see how people actually slip into the space sector. Yeah, sure. So I mean, for me, I wanted to go to Braiman. I had a girlfriend at a time, and she was German, and she was studying in Braiman. Okay, what could I do there? So I was looking for a way to do master thesis and found several ways to do that in Braiman. One of them was at the DLR Institute of Space Systems, which was just recently founded there. So it was completely new, and they had a very nice master thesis work on disruptive space technologies, which is very cool. I thought it was really nice. So yeah, I decided to create something with space, then I could use my background there. I focus a little bit of my focus on technology and innovation, which I did more in my studies. I was focusing more on different kind of agricultural and sustainable technologies, but I thought space, why not? It's very cool as well. But then I kind of rolled into that, and then after my master thesis, I kept on there as a researcher, I wrote my PhD on the topic, is it, but it came very far. Yeah, I'm focusing mainly on the top of the disruptive technologies, where then I did also several studies for ESA, the European Commission, the DLR internal study. So then there was a huge wave of disruptive technologies, what are they? It was a new term, and then we tried to find out what does it mean for space, let's say, how do technology and innovation cycles work in the space sector? Yeah, around what time was it? Roughly which years, are we talking about here? 2009, 2010, I think. I'm only asking right, because this is clearly, as I imagine, this is clearly sort of like, I mean, right now, space is more and more in use, right? And people are sort of talking about space being disruptive and disruptive technologies, but back then, this was a much more, you know, less publicly-known field. So kind of with the hindsight, I'm kind of curious just to know sort of like, what would have been examples of the disruptive technologies people were looking at in space? I mean, back in those days, I mean, so what we did is several forecasts, studies and everything. So it's good to see, let's say, hindsight, what worked and what didn't work. We very much believed into the, the, the evident of of 3D printed technologies, which partially happened, partially didn't, I mean, most highlights, now days have 3D printed metallic parts. We of course also said, like, in space manufacturing, that has taken a little bit longer, but, but it's starting now as well. So those kind of things, we're focusing on new batteries, technologies, new solar cells, and those kind of things, has been taking a little bit longer, but I can, there as well, flexible solar panels, for example, yeah. So those things are coming, but a little bit more slowly than we thought, rise of onboard processing, we said, which is definitely a case, which is happening right now, both in the telecom and earth observation. So that's definitely something to focus on. We also forecasted at the time quantum technologies in space, focusing mainly on QQD, but also quantum sensors, which is, which is currently not happening as well. I mean, we, what we did is, well, the forecast is okay, next 5 years, we realized right now, back then, we put sure, probably, it's 10 years, everything in space just moves a little bit slower than we initially thought, but it is getting there. So you can already see that, yeah, there are being, let's say, operationalized, commercialized, at least more talked about partially, so yeah. Yeah, yeah, yeah, that's this famous quote. I forgot somebody who said, right, the technology, it like tends to move, it tends to move slower than people think in the short term, but then faster. Like over the longer time frame, probably, I guess, hopefully true for space as well. So like, I think pretty much all of the things you mentioned are basically sort of on the hardware upstream side. Just out of curiosity, did you guys sort of think about like downstream, what might happen in downstream as well? So the focus at the time was really, I mean, disruptive space technology focusing on hardware. So we basically only launchers and satellite and then primarily focus on satellite technology. So downstream, not too much know, because I mean, it's more related to other areas. For me, the downstream space is a enabler. It's a logistics kind of thing, but it's not a driver. I mean, the biggest thing happening on downstream, for example, are automated processes and artificial intelligence and machine learning and those kind of things. And I don't think the driver in that space, it's just a user, potentially. And then you said your PhD thesis was on the same topic? Yes, focusing on disruptive innovations. Yeah, at the time then I did a project together with OJB and then I was asked to join OJB and then was not so easy to write a PhD on the side and do a management job company. So slowly, you know, the PhD thesis became older and older and didn't progress at some point. Yeah, did you start in your time at OJB? Did you start directly on the business management side or did you ever work in a technical role? So I started in pre-development doing studies and technologies. I was working a lot of different proposals and those kind of things. And then slowly, I built up the area of technology coordination of the department was called. So the department was first me and then I hired a couple of new people because it more and more need, for example, through your printing and to do software technologies and those kind of things. Then I built up a small department with a number of smart guys. They were really enthusiastic focusing on different kind of things like creative makerspace, for example, development. We did crazy stuff basically. We were basically the creative guys within the company. So. - Yeah, that's what I did then. But yeah, I mean, I was also responsible for many of the R&Ds that we developed. So for example, I did the entire 3D printing or it's manufacturing development for the company for about two to three years. So I know that quite well. I focus also on implementing augmented reality and virtual reality in the clean room environment. So that's kind of things I did. So it usually was that I start different activities and then at some point I had to find somebody else with more of a user or a technical field to do it. But it was nice to be at the forefront or at least at the start of many of them. - Yeah, it's kind of interesting. I was to some extent just almost straddling like business aspects and then some of the technology things. I was just gonna ask you sort of one interesting question to ask about, you know, the deep tech company always is sort of the how the business side works together with the engineering side and how that interaction is. - Yes, yes. So I mean, I know the technical side or at least the difficulties you have in technology development for space, quite good. I mean, honestly, the business side only for me came later about 2019, I started doing this strategy in order to be venture capital and those kind of things. So then I started looking more into business models to be honest and more. Let's say product development where that was not really something. You look at the return of invest, for example, or business case for technology development or innovation. I mean, innovation, let's say technology development itself doesn't help you that much. It only becomes the innovation once you are able to market it and so successfully use it. So I was thinking on that, but to really look into a business plan of a company and everything was completely new for me. But you're learning by doing so that's how it's good. - Yeah, yeah. And can you, because not everybody may know, I mean, I suspect some of our European listeners know, OHB is quite well, but we have a lot of listeners also in North America, the parts of the world. Can you just kind of give us a summary of what OHB does like its core businesses and then kind of delve into the strategy to the extent you can talk about it? - Yeah, sure. So OHB is a family-owned company, which is a little bit weird and to do this domain. I mean, most let's say people that make large satellites or set them integrators are larger companies, like Arabos and Antasas, the new space of Boeing and Lockheed and those companies. So we are a family-owned company. We were founded in, I think, 1985 when basically the company was bought by Mrs. Fuchs, who basically just wanted to do, didn't want to sit at home anymore. So she just bought a company. It was a hydraulics company, making things for the German submarines. And then her husband, who was a very big space fan, was also an engineer working at Erno, which is currently Airbus. He said, "Okay, I'm going to work in this company as well, "I'm going to transform it into a space company." - Today just started doing, yeah, I mean, high-altitude rockets and, yeah, basically small, fridge-sized satellites. I mean, right now you're called CubeSets, but then there were small sets basically. - Yeah. - And then basically over a year, started trying to tackle bigger and bigger projects, taking a lot of risk coming this new space project you currently have right now. They were really at the forefront of that. They were taking a lot of risk doing very things, very unconventionally, let's say, like that. It's effective to fit, let's say, Russian intercontinuous missile launchers, trying to find German military satellites on there, and everything has to get it as cost-effective as possible. Then basically through this approach, they were able to beat, let's say, the incumbent into the field, which was now Airbus within Germany, and basically take a large part of the share of the market there. And then over the years, we started buying more companies, so we bought, for example, Kalakowacchi space, which is now which we Italy, which is also system integrated, basically. We founded a company Luxembourg, Lux space, and it's also a small satellite operator. We bought which is Sweden from SSC, I think. So basically we're a group of satellite integrators. What's special about us is that we're not vertically integrated, so we don't go down the value chain. We don't make any of this, make some of the subsystems, but not many, and not many of the component. So most of our competitors are more vertically integrated than we are. For us, that's, I mean, the weakness and the strength. The strength is you can make very good system level designs. You don't have, you know, we have to take this component because it belongs to our group. We're much more flexible when it comes to that, which is very helpful. Of course, you cannot really do leverage or scale effects. I mean, our competitors can do it more easily. They can do, okay, if we don't make the customer system level, we'll make the profit on the component level. But, you know, overall, I think this is a benefit that we had over the last couple of years. And we've become very strong on this. So we've grown quite significantly over the last few years, about 3,000 employees now, which is interesting. On the vertical integration side, I just have to ask, I mean, there's been so much, you know, news about, you know, not only in space, but in general about like supply chain issues globally, right? Have you guys, has that helped you back in any way because you're not vertically integrated? I mean, I remember having this conversation. I think there was that satellite in DC. You know, this year, I asked somebody like about the waiting time for something very simple, like a start tracker. And he was like, oh, yeah, 12 months. Like, what are you kidding me? - That's short. I mean, the past thing, yeah, it really depends. So it hinders us in the two a certain way, yes. I mean, let's take a large part of a company is focus more on institutional projects. And those are very long lead times in any case. So there, I mean, you've already ordered it. It gets more to a problem when your suppliers don't get their parts. I mean, the triple E parts are those kind of things that they require on that. They will have delays, which means we will have delays. Yeah, that really definitely impacts us. But it's less the case, for example, if you would have a truly 100% commercial business and you can just not, you know, you're supposed to live a satellite within a year and you have to wait another year for your components to arrive in that impact is a lot harder, of course. But yes, of course, we feel advised very much as well, yeah. - If you're mentioning institutional projects, so that's what I mean, your sort of main customer base is people like space agencies. - Currently still, yes. We do, so we have several parts of the companies. OGB system, which is placed in Germany where we mostly do institutional business. The other companies, the smaller satellite integrators are focusing more and more on commercial business. - Okay. - So there, it's a lot more of a mixed and a commercial business is always a bit, I mean, you have export business. So for example, setting to another government, we can say it's commercial, my export business and then really truly commercial business. So it's a bit of a mix there. And depending on which companies are, usually the smaller your satellite gets the larger, let's say, a potential commercial park gets. So basically, I mean, very large satellites, commercial companies is only telecommunication. - Yeah. - So one and a half ton commercial satellite that much. - Yeah, yeah, yeah. So for the, you're, I guess, subsidiaries of the parts of the company that pursuing more commercial customers, so we're talking, I guess, CubeSats and small sats there. - Focus more on small sats. We do CubeSats as well, but we're not a CubeSat platform provider or anything. We provide CubeSat systems. And if we talk about a system, then it's here. We arrange the launch. We arrange the development of the payload. We maybe procure the platform or something like that. And we basically offer an end-to-end solution to a customer. - Yeah. Okay, so somewhere where we're talking, sort of, those companies would be playing and broadly speaking in the space where some company is playing like, I don't know, like in a particular order. Actually, let me take a particular order. Nanu Avionics, I was sponsored. Thank you very much. AC light space, GOM space, Teren orbital, EnduroSat, people like that, right? - Those are not our competitors, because we don't go into the platform range. I mean, Nanu Avionics, perhaps with a new platform a little bit, but we're doing in a different class a little bit. And we are focusing on a bit more higher reliability, longer lifetime, more broadly things. So we go, let's say minimum, I mean, we do queues, that's with a customer once it, but our real-down limit is basically 80 kilograms. - Okay, okay, yeah, fair enough. I guess most of the people with all of them mentioned would be smaller, although I know, I think quite a few of them are sort of talking about offering bigger platforms now, because I guess that's where they see, that's where they see the market going, is that something you would agree with that we're kind of moving back towards bigger, but relatively bigger sizes from like, you know, like a few years ago, to CubeSats was like the big buzzword, right? - Yeah, I think what a lot of companies realize is that many CubeSats is nice, but you have severe lifetime issues and severe payload capability issues. I mean, I think, for example, what Planet or Spire does and what I've able to get out of the forms of CubeSats is quite impressive, but you come to certain physical limits. And if you want to work a business case, I mean, CubeSats, I mean, lifetime one or two years, if you go for bigger satellites, like where we, for example, are you seven or eight years? I mean, in the end, if you look over the lifetime, what the performance will be in your cost per year, you know, it very quickly becomes a better option, take a little bit higher reliability, a bit smaller, bigger satellites. So I think especially the class range, let's say, 50 to 200 kilograms, we'll get a bit of a growth. It's only part of the market. We see a huge growth, of course, into the two to five runs kilogram, but those are not really for platform providers because those are dedicated constellations, those are mostly the telecom mega constellations, but those things cannot really tackle as a platform provider because that's not what we do, I mean we make a platform and we sell to multiple customers 10, 15 different customers and we put different payloads on there and that's a little bit what our market is. The other interesting thing that I noticed that may be going on with some of the integrators is some sort of vertical integration, right? And it even starts as far back as the launch providers, so sort of like launch providers, I guess to some extent rocket lab and then AstraZad, okay, I guess they realized they have to fill their launchers, right? So they started kind of doing satellite platforms as well. And then some of the satellite integrator guys like I mentioned before Karen Orbital, I guess they started realizing they need to like create demand for their platforms, so they're like, okay, let's do our own constellation for something, you know, like typically that seems to be just kind of like general vertical integration going on, I guess sort of like trying to generate demand, is that also something you see? And how would OHB think about this? Yeah, I mean it's definitely true. I mean the grass is always greener on the other side, you know, for rock and manufacture worth and then to satellite, I mean, it's a bit of a different reason why rocket lab did it. Of course, they were very much fun with it back and they managed to get some good opportunities there, but also like companies like Spire, for example, of satellite, the service, those kind of things, so they come a little bit into other areas as well. And of course that does make sense because it brought in some your markers, you try to grow to an area where you think that the profit margins are bigger, so that makes sense to diversify. On the other hand, I'm not sure that the vertical integration is always the way I mean, if you check the planet, I mean, they build and design their own satellites in a time where basically there was no market for cubes. Oh, that's tough, yeah. And they argue they really say, okay, actually right now we would do it again, we would start from scratch now, we would not do that, we would buy components on the market, use the competitive industry, you know, that's much more much better. At the time you had no market for such a thing, so really integration is good, if you have a lot of money behind you, you can dominate the market, you know, you come on monopoly or by pushing at price difference, if there's already an established market out there that might not be the best way to go, to be honest. Well, a lot of companies do, they focus more, they go to an area where currently there is no market, so I mean, satellite as a service is a new concept, which is for a lot of satellite manufacturers. And an interesting point of view, because you go more, let's say in a corporation with the operator point of view, usually the operators, if they're successful, they make a lot more money than developing a satellite, so that does make sense. Yeah, so this is also an area where we're thinking of going for Australia, of course, and let's say too much about Australia, but we're helping our downstream domain, which focuses especially on services and product based on our observation and satellite data. So that's something that we're developing. We as a company, we decided to split our company into three parts, so the space systems part, which is a satellite integration, the aerospace part where we focus on launcher components, where we develop also our own launcher, rocket factory outspork, and we make airplane components, and then the third part is always be digital, and there we really try to focus our activities that we focus on the downstream. So we, for example, make a lot of products and services, focus on the maritime industry, focus on the railway industry, we focus on everything basically involving critical infrastructure, so by monitoring, we do airports, logistic fields, harvest, those kind of things. That's a little bit our current focus of our interest there, also the downstream applications, but we also focus, for example, with our GPC activities, on more agricultural applications, with our investment into Constellar, or basically activities focus on mitigating the impacts of climate change and carbon emissions monitoring. That's very broad. Let's say, a number of activities we're doing, some of them are very advanced in some of them a little bit less, but this is the areas we're pushing. What would you say sort of the underlying DNA of the company? So like when, you know, those, maybe people come together from in a big corporate meeting or offset or something from those, you know, three different parts of the companies. What is sort of like the shared understanding culture, whatever you want to call it? Yeah. But in our GB, there's a large degree of pragmatism, I would say, we try to do stuff. We don't have a very high hierarchy. There's not the, there's only, I think, four layers within the company that's fairly quickly decisions can be taken very quickly, also because we have a family ownership. So the CEO of our company is also representing the 70% shareholder of the company. The CEO is, that's important. The CEO is, is from the family, right? Yes. So he's the son of the founders of the company. And that makes things very easy because, you know, you have to make a decision and that can be done, I mean, within certain boundary conditions can be done very, very quickly. I mean, it's kind of, it's kind of like space, space x without tweeting, right? Exactly. Yeah. That makes it very, very easy to do. Let's have a look at it. It's also the, I mean, we have very much a family environment there. You know, the, the, the, the former founder of the company, Cristal Fuchs, she's like 83, 84 right now, and still comes to the office every day. Okay. The CEO, she still goes into meetings, complaining that we spend too much money and we have to be more, let's say cost effective and those kind of things. So I mean, that's, that's definitely something that, that lists through the son of the, of the, of the CEO is also quite often in the company now and getting more and more active. So yeah, it's, it's a really, it's a family company there. And it's not only the family that matter, but all of the employees are part of the family. And that makes it, makes it very nice. Of course, it gives a family has some trouble, of course, as well. Sometimes it's always, it's, it's the way it's a certain soft thing. It's about a lot of other relations and everything. I think overall, it makes us very, still very effective and very agile, which is something that you usually don't get in a large aerospace company. Yeah. I mean, for, for, layers of hierarchy, for traditional large aerospace major sounds like paradise. Yes. Yeah. And for 3,000 employees, it's also quite a lot. Yes, yes, yes. So, I mean, family owned, but I mean, you guys are also publicly listed, I think, on a German stock exchange, right? Yes, we were publicly listed. So 30% of our stock is free-float. So that's basically publicly traded. Okay. And I guess that sort of brings, you know, certain things with it right, you know, quarterly or half yearly reporting. Maybe I guess probably some investment banks are equity researchers following OHB? Yes, yes. So, the, the reason why we did it at the time is to create transparency, also for our company, for our customers. Because, of course, this kind of reporting need that you have to do adds a little bit of transparency that money is not wasted or those kind of things. Of course, normally, if you would have a company with 70% family ownership and 30% free-float, it's not really investor, let's say it's interactive or large investor, too. Institutional investment, yeah. Yeah. So it's, it's, it's, we have is a lot of small shareholders. So that's, that's not too, let's say, interesting. The good thing is if we're by, I mean, the 70% keeps control over the company. So there's no else stepping in, which is always the problem with such company that the large Chinese investor steps in and takes control of those kind of things that will never happen with us. So that makes it, makes it good. And I guess on the upside, as usual, if you are a list of depending on, well, depending on better share prices, it can be used, the shares can be used as an acquisition currency, as well, in theory. Exactly. Okay. So maybe let's go through the three parts a little bit. So, in space system, so on the integration side. So I'm wondering since you guys are, as you said, you know, value added integrators and you don't typically do the components yourself, um, say any sort of opportunity you see in, in certain satellite components. And I'm asking that because, you know, we have a lot of entrepreneurs and potential entrepreneurs listening and, you know, maybe that's something you've seen is like, oh, I wish I could get like, I don't know, like is it better still a panel, or something, right? So, so for me, I mean, for, for me, what's more interesting is to develop something that's, so I think there's a lot of potential in the market to find cost-effective solutions there. Let's say, so you always have different areas, you know, you can be technically a lot better than what is currently out there. That of course is a, is a little bit difficult to do as you're going to establish player. If you become a manager, it's, it's really great to be cost-effective and there you have a huge potential because honestly, a lot of, let's say, current components, which are being developed in the space industry are ripe for disruption when it comes to a cost point. It's just true, it's so expensive. I know, I mean, that's one of, I mean, as you know, I haven't been in space that long, right? Maybe like six years, but that's one of the first things I know, it's just like, that stuff is so expensive. Like, what does a propulsion unit cost 300 to 500,000 dollars, you know, for, yeah, or a start-track, or a start-track or cost like, whatever it is, 30,000 dollars, I mean, it just seems so expensive. Yeah, I mean, that's a little bit of the market. And the market dominated up until 10 years ago, was by ECSS standards, or at least within Europe, and NASA has its own standards. It's just an entire row of tests and things that you have to do, which is great for a science mission, you know, or a human space-flight mission. You want to make absolutely sure you're building things for the first time. So you try to test every, on every level, you know, you do from, from the most single component. to the little bit subsystem level and system level. To all of the tests, you do stack only each other and you make absolutely sure that there can be no failure. If you go for more operational mission or more commercial mission, the fact that you've already built it and you're using the same components, perhaps you only have to do an overall system level test, which makes just a lot more sense. And that just really decreased the cost. I mean, the biggest cost in the space industry is not the hardware or those kinds of things. It's the time it takes to make something, the amount of tests that you have to do, the testing facilities are expensive. You have a marching army sitting around, if you do a testing, they have to wait. And those kind of things. The majority of the costs is in there. But the good thing is the market is also moving more and more away from this very conservative approach. I mean, we call it now a new space. It's just taking more risk. It's let's say handling risk differently. It could also be, I mean, one of our first projects that we did was, for example, the Zaluk consulates for the German military. You could have known the consolation with a number of, well, it's like two very high reliable satellites. But what we did, we did build six and three. That's reliable. Let's say like that. Or let's say, did not fully test it. And we said, okay, if there's there, I mean, they were still reliable, they're still all flying. They're still doing very good. But we had, let's say, a reliability or redundancy on an overall system level, which wasn't done at the time. Right. And therefore, you're able to put a different risk away from like a single system or a single sub-system or a same component. You treated as an overarching methodology, which focused on the entire thing. So not only then your satellites, but all your ground system and everything, they tried to mitigate what can I do to make a cost-effective solution and by putting the risk that the right place is. And then that's something that we've been very strong in the beginning. Of course, you can save a lot of money by balancing this out in a very good way. Yeah. So besides people, is that some of the things that we talked about, sort of like satellites getting relatively bigger again and sort of what you just mentioned, people getting lower in cost? Any other sort of noteworthy trends on satellite integration? You think that they're worth pointing out? I mean, on satellite integration itself. So the thing is always the more satellites that you build, the cheaper it will get, which is always the case. I mean, that's the same thing with launcher. I mean, cadence of launcher, the higher your cadence, the cheaper your launcher will be. That's the same thing for satellites. And of course, what we see right now with all of these mega-concilations, the people building more and more recurring items and therefore processes change quite a lot. I mean, we'll set already before you tried to focus on more on a system level, but also the way that you produce satellites becomes more of a, I wouldn't say, serial production, but often more kind of a batch production, which is more usual. Yeah, yeah. And therefore you have different tools. So you can use, you can optimize different processes today. You can standardize different things and things just become, the quality shifts a little bit from doing one quality process wise, very good to focusing on a standard set of processes, focusing to try to get your quality there better. So that's a lot of things that are included there. One of my favorite examples is that you basically, you build a satellite in one of the people do large telecom mega-concilations. What they did is they tested their first satellite exclusively, like really, really went down into detail, tested everything. And then everything what came afterwards, for example, for the thermal model, they just put the infrared camera, they put all of the heaters on or they put external heaters on and just check if this is the same as the reference model of the first model fully tested. If there is less than whatever so many presented deviation, it's check pass. And that just makes things a lot easier, or a lot cheaper. You have to do this once. You then have to do it thoroughly, but you don't have to do for everything afterwards, which is not better. Yeah, and that doesn't make sense. And like you said, it's kind of a going from really low volume production, not to, yeah, I agree, I wouldn't call it mass manufacturing by any stretch of the imagination, but I mean, sort of at the extreme end, I think SpaceX is doing something like 200 satellites a month now. And so that is of course very different from historical satellite integration. How about we're talking mostly hardware and I just realized that there seem to be a lot of things going on on the software side as well. I mean, as to the number of startups that have been funded that sort of claim they're improving the software part of the design and production process in some ways, that also something you're seeing. Forseller manufacturing or in general for design. Yeah, well, for design and manufacturing. And then there's obviously stuff for an orbit operation, but I meant more for design and integration. So for me, the most interesting is model-based system engineering, which is really on let's say hype or not hype, but very much of push happening right now. So the problem that you have is that with let's say mass customization of what we're doing, so basically you create different platforms, where you do different customers and everything like that. The complexity gets really high and you don't really want to repeat everything yourself and you want to automate process as much as possible. And you can really do this with model-based system engineering, basically reducing the complexities there. For example, different simulation loops, you can do automatically, you can do a fact check, for example, is this possible or not? And there's many different things that are happening there. It takes different roles into the early design of the satellite. It's called more, let's say concurrent design approach. It's more implemented in there. The latest age is it's more the model-based system. So that's a strong push that's happening right now. It's also being picked up by ESA right now. Luckily, it's pushing a lot as well. And I think the company that adapts those kind of tools, a private life-speak management system and a model-based system engineering system will definitely have an actual advantage there. - Okay, let's move on to the second part of the group, aerospace, but as you mentioned, this includes sort of the launch part through RFA rocket factory, Oxbock. Do you just want to give us a quick summary of people who don't know what RFA is and what those guys do? And why did you guys decide to get involved there? - Yeah, so RFA is, we're building our own micro-launched, RFA1, which can launch for multiple different launchites over the world, which is good. It's basically fully designed to fit into containers, so it's nice and easily shipped, which is good. It's designed to be the most low-cost solution that you can get within this domain. So I mean, everything, I mean, if you come to RFA, everything is focused on low-cost production as much as possible. They use, for example, printing as well. They don't really do all the quality checks that we do for our satellite components. They build it once, they check it, and then afterwards, they look for more stable process and they don't do all of the fatigue tests and all whatever you need on a normal component. So everything is focused on the low-cost, manufacturing as much as possible. For their tanks, for example, they use large brewing fats, brewing tanks basically, a manufacturer for that, and those things still. - I guess they all based in Bavaria, so. - Bavaria, yeah, so they use that. So they don't use unconventional supply chain as well. There's almost nothing of them. It's the traditional aerospace supply chain. Try to find as much low-cost solutions as possible. I mean, their entire test setup, for example, has been just filling large, so they made a test and themselves, which is just a metal frame, and then basically it's shielded by several containers just filled with sand. And then they just, you know, they do the launch testing on that. So it's an extremely pragmatic approach, which they take. It's an extremely motivated team as well. They have experience of the main CTO, Stephen Bryshank has a good from Rocket Lab as well, which is, you know, it's just helpful, you know, if you've been there and helped develop a rocket and it's just great to duplicate that experience. It's a very interesting engine design that they have, which is, yeah, which is very good. So, yeah, cool team there. And the reason that we tried to get into that is we saw that there is really a potential market there for a European launch development into that range. You know, the Ariane is good for, you know, all of the large satellites that we have to launch. The Viga covers its part as well, but on the lower scale, which focus more really on a cost-competitive product and on small satellites, focusing more on, for example, on our observation, there is really a large market opportunity there. So, yeah, that's why we decided we want to get into this as well. We found a really good team partially coming from New Zealand back, but also partially from the engineers that are working at Ebtia Aerospace, which is one of the companies making large components, not only for Ariane, but also for SLS and for some other, not quite sure if you can say, but definitely some other U.S. launchers as well. They make much tanks and large technical films and those kind of things. Yeah, and so the combination of the smart people already having an experience in large aerospace products and let's say more new space environment, they've made us think that we have really something unique there. So, it's also the little farm launcher. - Yeah, yeah, and I should say for listeners, actually the two co-founders, Stefan Breishank and Bjorn Spurman, were on the podcast about, I think, about 50 episodes ago. I should really have them on again, but the episode is. out there. Yes, you can call me about two years ago, so people can listen and, you know, and see how that all went. And this is just to put some numbers on this. I think this is a payload size. It's about a ton or so here. Yes, it's a 12-minute kilograms and not the first launch, of course, but that's the final aim there to go into that mass range up to 12-1 kilograms. Is there an expected date for the first orbital launch? Well, I cannot say that. I'm pretty sure that's expected date, but I don't want to say anything else. Okay, cool. Let's move on to, well, there's OHP. I kind of forgot to ask, OHP, what does that actually stand for? I'm just going to guess the B's for Bremen or something, but this is not a space company, you know, it's not something space. It's like OHP, but it's like some sort of acronym. Yeah, OHP doesn't stand for anything currently in the beginning. So like I said, already in the before, the history was this was like a hydraulics company. So it was called Otto Hydraulic Bremen, so the electronics Bremen. And then they took over the company and they're like, oh, we don't really want to change the name, OHP is nice and short. Okay, we're just going to make it orbital, a high technology Bremen, so orbital high technology Bremen. Oh, I see. Okay. And then, you know, that's such a mouthful, and at some point they were like, okay, it's just OHP. It's not a abbreviation at all anymore, it's just OHP. Yeah. Okay, that's a cool story. Anyway, Bremen says isn't that as finest, yeah? Yes, yes, yes, yes, no need to change web domains. Well, I guess this before web domains were a thing, but anyway, yes, you're not by a name, and you have to change all the formats, and the letters, and those kinds of things. Yeah, the corporate clothing and all that. Okay, so moving to OHP digital downstream, and I suspect that's when we kind of move into OHP adventures as well. So what are some of the examples of, you know, to downstream activities, and maybe if you want to cross over, you know, some examples of, you know, your investments, you're probably known investments at OHP adventures. Yeah, sure. So, um, so I mean, what we do, for example, there is, is we do a resell of our AS data. So the outcome data that's more for the maritime industry, so we also make value added solutions based on that. So basically, just for those who don't know what it is. By the way, IAS is automatic identification signal. You can measure, you can listen to AAS signals every ship sends, listen from space, and you do the position of every ship over the world. As long as they have their ASS receiver turned on, which is unfortunate, not always the case, but yes. So basically, we are reseller for this data within Europe. We make basically solutions for that. So that solutions could be, for example, for our custom control ship comes in, you can see where the ship has been in the past, what it's been doing, and those kind of things. And of course, it could be, yeah, for more governmental applications, saying, okay, where are the ships that are going under my flag, where are they, or large shipping companies to check, okay, where are my currently ships at the moment? Those kinds of things. There are many different applications focusing on that. We have a large part working on railways as well, so we're most focusing on cyber security solutions in power or railway. It doesn't have too much to do with space to be honest, but it's something that belongs to our company, and that's growing quite a lot, which is also good. We're also focusing on navigation solutions, focusing more, for example, on jamming and spoofing of GNSS signals, which is interesting as well. We have an entire group for a large part of the company working on basically operations of satellites, and also antennas and ground stations, so they're basically focusing on the, yeah, basically, whatever happens on the ground with the satellite, yeah, so the entire, the build up of ground station operations and afterwards, and those kind of things. But we also do large astronomy telescopes, radio telescopes, so we also have a company in Chile that's a government desert that builds different antennas for the European Southern Observatory. We're building things in Tennessee, in South Africa, Thailand, those kind of things, so that's really focusing more on the tenor point of view. So at OSB Ventures, what kind of, what kind of founders and opportunities would you like to hear from? Yeah, so I mean, what we're really looking towards, I mean, OSB wants to grow this basis sector. I mean, basically, we want to hear that the use of spaces is optimized as much as possible. And what we believe is that the downstream has been neglected. There's a lot of potential there. You know, there's, there's many data of coming, for example, from the Copernicus, a lot, it's also a landslide, there's kind of things. There's many observation data coming down, and it's not been optimally used yet. So that's definitely where we're something looking into. So companies focusing more on the downstream, focusing partially more on our observation, that's a little bit our strategic focus. It doesn't mean that we're focusing only on that. There's definitely, if you have an interesting technology for launcher or interesting technology for satellite or something like that, we could be keen to invest as well, but we're focusing more strategically towards the parts that we don't master. So more than for us. So we're officially what they call midstream. So we don't look at the options. It's too much more than downstream. So any kind of somebody has a great application focusing on any kind of space data or space service or using space communications, or those kind of things there we are very interested in. An example of what we did in the past is, for example, Consteller, where it was also recently now associated to the latest funding round, they use infrared data from space to measure drought in plants basically. So they can see temperature on top of plant rises. The plant is thirsty. We use very layman's terms. And therefore you can see it's good indicator where there's drought. So you can do position irrigation techniques. You can apply to that. Another company that we invested in is the Searwood, which is a combination, for example, of the AS data we sell. So they use historically tracks of where ships went. For example, you want, for example, shipping routes from Hamburg to Los Angeles. And you can automatically see if you want to ship a container, you can see how long it will take, what it will cost, and what the CO2 impact will be. So you can basically optimize your routes based on that. And you can also do a path for reporting on what the CO2 impacts your container shipper, let's say per container, the CO2 impact was actually made by this shipping movement. So they can check them, for example, what is the ship, what is the motor that it took, what is the weather that was on the sea and those kind of things. So they can extract and see exactly how much fuel was consumed, basically transporting this container from A to B. Okay, so we're kind of coming towards the end of this episode. I mean, as usually we could keep going for hours here talking about space. But let me close by asking a couple of questions. So you know, I think first question is relevant both for your strategy activity as well as for wenshers. You know, if you want to go back to the time of your masters and PhD and you had a thing of disruptive space technologies in 2022, what would be some key highlights of the update. So right now looking into the future. So yeah, for me, let's say the still on the processing will definitely change it. I mean, we already see on the processing quite active now on telecommunication, on earth observation, where there's nobody who has successfully applied it into a business case yet. And that for me is really the future. I also see the more let's say coming up of data relays solutions as well as coming up. I mean, this will really embark a little bit. So currently we've currently always been doing the nervous observation, has always been you observe something. And then a few hours later, you can only get the data down, and you can really process until it gets to the end user. Any kind of data you get is one or two days year old. And that makes the economic value of it not as much. And I believe very much that say, especially on the processing of this data relays, will come to a certain kind of now casting where you can really see, okay, what is happening currently around me now. And that will really let's say accelerate the applications of this. That in combination with automated processes that you have on around. So that could be for example, chingling arts or visual tellers, but it could also just normally be embedded processes in existing digital architecture that you really come to a way where you know, an end user sees directly the information that it needs. And it's recent, you know, it's less than half an hour old. And then all of a sudden, a range of new applications get as possible. And for me, that is the most interesting part, which is going to happen in the future. And that will drive a lot of the developments in innovation. Yeah, that's definitely a good one. And I'm sure we could kind of talk about some others, but let's leave it here for today. And then the last traditional question of every episode is about science fiction. Do you like science fiction? And if yes, what are some examples of books, TV series, movies, do you like? My favorite book of science fiction is the June series. I mean, I've read this book like 15 times since I was very, very young. So I mean, I read many science fiction books, but that's the one that I always keep coming back to. So for me, it's a very nice mixture of science fiction, but also not two science fiction. So it doesn't have too much computing power and artificial intelligence. Everything focused on the mind. So it's a psychological one as well. Well, it has very much to do with politics and for me, absolutely fascinating this world of these, you know, huge shan junes and huge worms and this kind of like forecasting the future as well. Yeah. Yeah. Yeah. For me, great. It's one of my favorites as well. I think you can come back at various times in your life and it's going to read it in slightly different ways. You can pick up always different things. So for me, you're like I said, it's my must read every one to two years. The first book, I mean, there's many more books, I don't read the entire series, but the first book. Yeah. Yeah. Yeah. So in that way, fear is the mind killer. People don't know what that means. They have to go read the book. Yeah. We'll do this again sometime. Thanks. Bye-bye. Bye-bye. And that's a wrap for another nominal episode of The Space Business Podcast. Once more, if you enjoyed this, please leave us a five-star rating on your favorite podcast platform, such as Apple or Spotify. You can follow us on Twitter @podcast_space. You can support us at www.patrion.com/spacebusinesspodcast. Lastly, if you have any feedback, including ideas for guests, and that may include yourself, if you have an interesting space story to tell, or interested in being a sponsor, drop us an email at [email protected]. See you for the next episode. [BLANK_AUDIO]