Episode 50 of the Space Industry podcast is a discussion with Charles Miller, CEO and co-founder of Lynk, about the rapidly growing satellite-to-phone (Sat2Phone) sector.
Contents
Episode show notes
Lynk is a satellite connectivity service provider that currently has the world’s only patented and proven satellite-direct-to-standard-phone system.
Charles also has extensive experience in the commercial space sector, previously working at NanoRacks and serving as NASA’s Senior Advisor for Commercial Space from 2009-2012 where he advised NASA leadership on commercial public private partnerships.
In the podcast we discuss:
- The current structure of the Sat2Phone market.
- The specific technical requirements that make a Sat2Phone system operate effectively and consistently.
- The role of regulators and how space companies can better engage with them.
- Advice for aspiring entrepreneurs in the modern space industry.
- The future outlook for satellite connectivity and the Sat2Phone market.
You can find out more about Lynk here on the company website and please click here if you have any questions for the company based on the podcast.
Episode transcript
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satsearch
Hello everybody and welcome to today’s episode of the space industry podcast I’m joined today by Charles Miller the co-founder and Ceo of Lynk. Lynk is a name that you’re probably familiar with in the industry judging from the the typical you know.
satsearch
Viewers and and listeners to this podcast but um Lynk is essentially a business looking to bring the the power of space to the ah the the satellite phone industry building cell phone towers in space is is one one way that I and understand the company describes it chances of. Been very experienced in the commercial space industry for for a number of years and he can mention more on that he’s previously worked at nanaax and has been a Nasa senior advisor for commercial space which obviously he has plenty to plenty of knowledge and expertise to share with us. So um. We’re going to talk today specifically about the satellite to phone application area and industry. So but firstly I just wanted to say hello Charles welcome to the podcast and see if there was anything you’d like to add to give some context to ah to our listeners on the discussion today.
Charles Miller
Hi Hywel thank you for having me I’m great to talk to your audience and I’ve been in the space industry the commercial space industry for over thirty years before commercial space was cool.
Charles Miller
And for a while I was like the redheaded stepchild in the space industry where you know I could point out all the different ways. Commercial space could solve some of the problems and nobody wanted to hear it. But.
Charles Miller
So I’ve thought deeply about a lot of the issues I think it’s really exciting and I want to encourage everybody in the industry to be more affected and and to help them succeed So I’m happy to share some thoughts and insights during this call.
satsearch
Excellent. Thank you? So just to be clear. The commercial space is cool now right.
Charles Miller
Yeah commercial space is very cool Now. It is the new new thing but a couple decades ago even a decade ago. Ah, it, You know there was ah it was It was the threat and and you know you were you were not welcome at the party.
satsearch
Right? Well I’m very glad to that things have changed and um I mean that that’s a great introduction to our discussion today. So um, like I mentioned we’re going to be talking about the satellite to phone sector of the industry now or or sat to phone for short and the set to phone sector is. Getting increasingly competitive I think it’ it’s well known that there’s a huge potential market out there for of the um and unconnected or poorly connected potential users and Lynk is obviously very active in this sector. So I Wonder if just to set the scene a little bit. You could Give. Listeners a bit of an overview of how the market is structured and um, you know, maybe share some statistics on how many people are not connected and the demographics of this this ah market that’s addressable.
Charles Miller
Well I’m happy to do so so let me start from first principles for your audience. Um, there is I’ve identified three target audiences for satellite services where there’s billions of customers one is a.
Charles Miller
GPS position navigation timing mostly by Gps but other satellite systems another is weather billions of people, use weather services and they and they get you know weather is helped by space and the third one is communications now of the 3 sectors each of them billions.
Charles Miller
There’s only one of them where people are used to paying for the service people get free weather services right? people get free. You know position location timing services through Gps or other you know position timing services so they don’t pay for it. It’s really hard.
Charles Miller
Get people to pay for something. They don’t want to pay for communications is a multitrillion dollar industry that people are willing to pay for and so solving a problem uses satellites is really very clearly analytically the the largest Target Market. To go after if you can find a problem that to solve they’re using Satellites. So That’s what we that’s the kind of thinking we started with and and that’s the type of thinking that anybody getting in the space business is like what market are you going after trying to figure out a problem. You’re solving so we in in.
Charles Miller
You know going to more specifically to what you asked. There’s over 5000000000 people on the planet who have a mobile phone a standard ordinary mobile phone in their pocket. It’s you know, supposedly five point four billion people right now. So it’s a large addressable market and I think it’s. Common sense. Most people don’t think about it. But you’re not always connected by your mobile phone. There’s black spots and the truth is is only about 10% of their surface which is huge has connectivity to a ground-based cell tower or to a wi-fi hotspot the two ways your phone connects.
Charles Miller
That means 90% of the planet is disconnected about 75% of their services is seas oceans but you know that it it turns out that only 25% of their earth landmast has connectivity now a lot of that is Siberia or Antarctica or. Greenland but there’s a lot of disconnectivity even in in different countries and and so that’s part of the problem and then the other part is even when you have connectivity you know, natural disasters or even human cause disasters take out your connectivity and you’d like backup so that’s the problem. Our. Our research shows that about 15% of those 5000000000 people with mobile phones are disconnected at any given point in time which the mobile wireless industry is very proud of the fact they have 85% connectivity.
Charles Miller
Right? And you know people come and go into rural remote communities and have small black spots and and some countries have better connectivity than others you know here in the United States the connectivity is over 90% in and other markets. It’s it’s less than the 85% connectivity but you know. It’s 15% you think well that’s not that bad but 15 % times 5000000000 is 750000000 people at any point in time are disconnected so that’s a big problem that is a wonderful big problem for somebody who thinks like an entrepreneur. And because you know anything multiplyed by 750000000 is a large number if there are people willing to pay. But it’s even larger than that. So we’ve done the research that that’s what any point in time people are disconnected that about. 40% of people who have a mobile phone report. They never have an ah extended period of disconnectivity any point and time in the year that means 60% do and that’s these are people probably There’s probably a lot of people who live in.
Charles Miller
Suburbs or cities but they go traveling on roads or go visit friends or family or they like hunting or fishing or hiking or failing and they’re disconnected and I think most people. You know they were a little bit ah about it and then they forget about it because that’s just the way it is. You know we’ll just have to be fine, but that sticks you know 6000000000 people 60% of five billion is I’m sorry 3000000000 people experience some extended period of disconnectivity during the year
Charles Miller
So this is the problem that we set about to solve the reason for this is ah you know people you know we want to explore everywhere. We don’t want to be constrained to where you have a phone and but the reason you can’t extend.
Charles Miller
Ah, Connectivity mobile wires everywhere is the cost of cell towers. It’s really not just the capex building them. But it’s surprisingly expensive to operate cell towers and there’s a bunch of operational costs in cell towers including power real estate. You got to put security around the towers kids.
Charles Miller
Crawl on them in first world. So you yeah to security but in emerging markets they tear down the towers and sell it for scrap and then you a lot of towns and cities they get they charge fees and you know taxes on the cell towers to pay for their government services. So operational costs.
Charles Miller
And then the back hall to the towers in these remote and rural regions. It can be very expensive. So It’s just you know it can be very expensive to operate them and satellite cell towers are all fixed costs. We don’t pay for Security. We don’t pay Taxes. We don’t pay for Power. We bring our own power. So It’s all fixed cost 0 marginal cost. So Our operational costs are about 4 orders of Magnitude lower than a traditional ground-based Tower. So. It’s a that creates a huge opportunity for you know? Ah. We can. We can fill in all the black spots at orders of Magnitude lower costs and still make money.
Hywel Curtis
Right? Excellent! Thank you. That’s ah, a great introduction to the topic and yeah I think the loss of connectivity is a problem. Everybody can relate to. We’ve all needed connection on our mobile phone at some point when it’s important and we haven’t had it and as you say. We treat it as a problem that comes and goes and it’s no big deal and the industry is proud of the 85% connectivity time but um, 15% of your waking hours. Disconnected can be ah you know could be a problem for you if certain things are happening so ah and yeah, ah. Really understand the ah the way you’ve laid out the cost benefit analysis there comparing the um, the ground-based cell towers. So thank you for that was 4 orders of magnitude lower operational cost is is astounding. You think of you think of these cell towers as fixed points that need nothing need nothing more than and a bit of power but obviously that’s not the case. So. Um, thank you for the introduction to that chart.
So next I guess to dive into the technology now many innovations have been proven in space in the last few years and particularly in the low- with orbit or low with orbits but sort of a consumer technology like satellite to phone requires both performance and. Ah, reliability importantly reliability and you know reliability as you’ve mentioned is one of the key defining factors of of ah a mobile service mobile connectivity service. So I wondered if you could take us through the the hardware and software that is required to deliver your your service or a service a satellite to phone.
Connectivity Um, particularly in places with little or no existing coverage. You know how does it? How does it actually work for the user?
Charles Miller
So first of all, let me congratulate you performance and reliability are both important important and the insight one of the first insights is once you get satellites in orbit and and get work out the technical kinks they can be very reliable. They are not. Don’t don’t get hit by hurricanes right? and they don’t have people you know, ripping them down to sell up for scrap and they don’t have people digging up cables so they can be very reliable after you get through the early technical development. You know risk and and buy down that risk. Um, and it comes down to Keek issue as performance. So. It’s the first thing is can you close the link 2 ways and conventional wisdom was wrong people. It’s it’s just physics you know of the link budget and and a straightforward if you have people who both understand the mobile phone and satellites and what what you can do.
Charles Miller
With the with the processing gain that’s in mobile phones and technology today. So that was straightforward. We figured that out first. The other insight here is you want to leverage commercial off the shelf technology the hardware put that in the satellites the inside how we do it? um.
Charles Miller
Is we take the existing base station software. That’s that’s three gp piece standard globally this is it’s like the tcp ip of of mobile phones. It’s 3 gp global standards put the software in the satellite 2 things break. Right? once you close the link 2 things break with that standard one is you that the satellite has to be in low leo to get any real significant performance right? You bring the satellite down in lowlio to get much. You get the stronger link margins two ways.
Charles Miller
Ah, and you get much more capacity per per unit of spectrum by bringing down a low leo and you get low latency. So all these benefits to lowlio that you want to optimize for but 2 things break 1 is doper shift now there is. Time delay. So we invented the technology in 2017 of doppler compensation and and tricking the phones into accepting to the delay right into accepting the extended range that is that causes the delay and the phones. Are not supposed to talk to a tower beyond thirty five kilometers and Gsm or 2 g or 120 kilometers and and Lte and they’re designed to break if they detect they’re beyond that distance. Well, there’s a very specific way. They detect that and if the the cell tower doesn’t cooperate.
Charles Miller
You can you know make the phone think well, you’re actually close but you’re just you know a little bit of congestion and the phones are supposed to tolerate congestion like so you misses what’s called a couple time slots in the frames that timeframes that are coming to the phone. And the phone says oh it’s just congestion. It’s not range. They think you can you know, get the phone to think it’s just congestion in the network and they’re supposed to tolerate that so we do dopper compensation at the satellite such that the phone doesn’t see more doppler than the phone can tolerate and the can in and the delay trick. And backward compatible with all phones and this works this this insight this is patented and in 55 countries now works on all two g three g four g and five g and we expected it to work in the future on 6 g and above. So this is ah a fundamental breakthrough that took us a couple years to figure this out and and what this means is your phone without any change. Not even software change will stay connected so your sms app on your phone with linked service will work so you don’t even need to download a new app.
Charles Miller
Now. Are there some interesting use cases where you could. You know we could create an app to take advantage of this yes where we have a service called Lynkcast where you get basically free weather data services no matter where you are that’s broadcast directly to phones. Yes, that’s an interesting use case you’d have to have an app for that or maybe an an app one of your ah favorite app is updated to add a Lynk API but your SMS app that’s already in your phone will work so that’s how it’ll work. You might when you roam into a remote area.
Charles Miller
And might you might get ah just like when you’re traveling internationally. It’ll be a roaming experience when I get ah when I travel to Europe from the United States and I get off the plane I’ll get this message pop up on my on my on my phone it says you’re now here it cost you ten bucks a day if you use it so I’ll get a welcome. Message will do the same thing and so it’ll work the way your phone works and it’ll be backward compatible with all these phones. Yes, and that was intentional. We we held to that that it has to be seamless. It has to be.
satsearch
Brilliant. So really seamless on the user’s behalf is the aim got it. Okay, that’s great. Yeah.
Charles Miller
No friction or is ah almost no friction and ah you know and that’s that’s that’s the way to bring this to everybody.
satsearch
Yeah, absolutely I mean we’re we we see this across all sorts of applications in the space industry that the end users want a result or performance and they’re kind of agnostic as to how how they get there. So.
Charles Miller
Actually nobody cares about satellite. It’s like if you’re a satellite entrepreneur you got to get over that if anybody cares you have a satellite right? They don’t care. They just want their phone to be connected everywhere. They don’t care. In fact, a lot of people. It’s apocryphal a lot of people.
Charles Miller
Well why would I need satellites I get I get Gps on my phone right? So they don’t understand what they just said so people don’t care.
satsearch
Yeah, yeah, and which is an an opportunity for for you. You know like I say to to make this transition seamless. So ah, you mentioned that the the use of the Leo was you know very important for a few reasons including maximizing. Capacity per unit spectrum and I’m as interested in how the spectrum is you know app portiontioned to organizations like you so the you know what’s the the road of regulators and balancing the use of the spectrum now this there seems to be lots of companies that can or or could.
Directly compete for access to the same spectrum in in an area already using mobile phones. How does this how does this work how do you meet this at at Lynk. Do you need a license for each country or what happens if users travel. You just mentioned. Ah you know yourself travel into Europe how does all this aspect of the service work.
Charles Miller
So great question. The answer is yes, anybody can do this and no, it’s not easy right? So um, so we thought I thought about this years ago when we figured out you could do satellite direct to phone back in 2015 and 2016 2017
Charles Miller
It was very clear. You could take many approaches you could get some satellite spectrum and persuade the phone Manufacturers put it in the phone you could you know you know, go go try to apply for spectrum which is be very difficult most of the spectrum is is already applied for um and the inside came was like.
Charles Miller
MNOs around the world already have spectrum. It’s already fun. We don’t have to put spectrum the phone if we use existing spectrum on the phone. This is almost exclusively licensed to mobile Network operators around the world and and so we decided our whole strategy and that we think this is the right strategy at least it is for us.
Charles Miller
Is to partner with mobile Network operators around the world they have. They have the spectrum rights. You’re absolutely right. Regulators are critical ah they and and M and Os are critical and and we got to have both for length strategy and and so but.
Charles Miller
It’s not easy. Let me tell you why it’s hard right? You have to solve really 5 it may appear to be easy on the surface and the strategy is it makes a lot of sense. But there’s 5 barriers you have to overcome to execute this strategy First of all you you need to have. Satellites that work on that spectrum. You have to optimize for that spectrum. You know? So so your satellite cell towers. Yeah, we’re using Uhf from like ah six seventeen and 9 sixty in our current operational satellite cell towers in space we have. The world’s 3 only commercially licensed operational satellite cell towers are our 3 satellites they operate from 176 to 69 so you have to have the hardware second you need to have the software that I just described the dopper compensation and the timing that we developed you need to develop that.
Charles Miller
Ah, that’s patented in 55 countries we we don’t think there’s any way around our patents. Um, third you need to have m and o partnerships they’re the ones with a license they’re the ones that are going to sublicene that spectrum to you and so you got to get ah ah do a business deal with m and os. Um, and and so that’s the third thing there’s 2 more you need to have an operator’s license right? So we’re the world’s only company that has a satellite tocell tower to standard phone opt.
Charles Miller
License in the world operators license from the Fcc we got it last September that is easier said than done many people predicted. We couldn’t get it and there was people opposed this to getting it and you know held up all these risks and the fcc in their wisdom decided to give us. License anyways because we had proven over several years that we could operate without causing harmful interference and and it wasn’t like we just hand wave. We. We showed the theory and then we had done several years of testing and proved. We could do it didn’t cause harmful interference. Testing in the United States and overseas and then the third the fifth and last thing is I think you pointed to you need to have market access. So it’s not just you know Fcc gives us the operator’s icing operate in orbit.
Charles Miller
But then on a country by country basis. We need to get like the transmit down into a country. We need to get their permission and and so the key insight here is yes those regulators are critical. Some of them are not going to want us to operate in that I just. Had a story in the wall street journal yesterday where the reporter wanted to ask me about China and so they you know the key issue is we don’t think the chinese regulator will allow us to operate in China right? and at least not now we we don’t have great relationships with China. Um, but and there’s other countries. North Korea isn’t going to let us operate in North Korea so you know but most regulators when we talk to them. They go. You know how soon can you have this in our country and the inside here is the regulator see this. Ubiquitous connectivity. Their people will save lives and change lives. They’ve been beating up mobile network operators for decades and begging them and pleading them and sometimes bribing them or you know it bribes a strong word subsidizing them paying them to extend connectivity. Right? So it’s a hard problem and the regulators are in many cases trying to you know, bring public benefits of connectivity to all their people and link it solve that problem so in some a lot of cases. The regulators be quickly become our biggest advocates.
Charles Miller
But you got to build trust with them. You you got to keep your word. You got to do what you said, you’re going to do and then deliver.
satsearch
Excellent. Yeah I think for for suppliers out there listening you know it’s 2 really important bits of advice that if you are offering ah a service that you know to to paraphrase. Well some of what you’ve said Charles. But if you are offering a service that is in line with the kind of national priorities. Ah of a country you will. You should find it easier to gain adoption in that country and similarly with regulators I’ve had a lot of discussions with people talking about different aspects of regulations satellite licenses launch licenses ground station licenses and and connectivity the common themes are open, honest and and early communication with the regulators and it.
Charles Miller
Absolutely in In fact, you just pointed at at something that’s very important for space. Entrepreneurs is a lot of brilliant, technically brilliant space entrepreneurs they have something they want to build they they make I see very often many. Flaws that that these brilliant people could learn 1 is just because you have a great technical solution doesn’t mean anybody wants it try to start with a problem first and then figure out how you solve the problem. Do it the other way around you’re you’re putting the cart before the horse find the problem first. The second thing and then.
Charles Miller
Is is ah politics always Wins. You cannot get away from politics in the space industry. It is all regulated. It’s under the outer space Treaty. There’s there’s policy and law and regulation and you need to have somebody on your team understands. This. You can waste a lot of time trying to design and develop a certain type of gadget that you will never pass muster with the Regulators. You know I Just you know, ah pick on pick on some I Just ah um, there was a you know balloon rockets right.
Charles Miller
A lot of people have tried balloon rockets. It’s a huge regulatory nightmare Regulators don’t want rockets floating around uncontrolled in their airspace that could just go off course and and then ah drop on some town right.
Charles Miller
They they dislike. That’s their nightmare you’re you’re just not yeah I Just think that’s a regulatory nightmare. So think about one of the things you need to think about when you’re getting into business is whether the regulatory how they’re going to react and whether they’ll support it.
satsearch
Yeah, Absolutely absolutely., Especially if it’s something new because you’ll have regulators without precedent to rely on without experience and so yeah, you need to early early communication. Be honest about it. So That’s great. Thank you I think that really leads into my next question. So. Lynk is you’ve mentioned a few of aspects of Lynk’s story from a business point of view. You know, discussing the focus on a large problem with a big addressable market a problem that can be solved a problem with where customers are used to paying for a service and you in some ways.
Lynk’s A really interesting case study in how to build and scale a commercially focused business and you’ve mentioned that you were always focused for a lot of your career you focused on the commercial aspect of Space. So I wondered if you could share any other lessons or insights on the process and maybe mention what you think you’ve got right in the business development. Maybe some things haven’t gone so well. Just to for our listeners out there.
Charles Miller
Well wonderful. So I’m happy to share some insights with the the audience I’ve been doing commercial space for over thirty years and I took the benefit of many failures and lessons learned over my career and you know I applied that to what created Lynk. Let me share some some thoughts. So first of all, you know, like my prior start was nanarack which spun out of a company called constellation services that had multiple failures um and nanaracks would leverage the emerging. You know nanosat industry which what’s used to be called cube sets but that was the original insight it like that at some point kind of thinking like Clayton Christensen the technology for Cubesats or nanossets isn’t be good enough that you could solve real problems so I started with that insight. This is an inflection point. It was created by Moore’s Law Moore’s law finally caught up to space and satellites and inflection points create great opportunity. So that was the first insight. So I I this and so what I’m about to describe is a process that anybody in this audience can repeat. Right? So I’m going to I’m going to share some some some insights and key principles that you could take advantage for yourself. So first is find find something that creates opportunity like ah, an inflection point Second find a big problem in the industry.
Charles Miller
So I was looking at like what is the you know what’s the killer app for small satellites I started looking at that created by this inflection point in Moore’s law and and the yeah on onset of low-cost launch but it was really more Moore’s law
Charles Miller
Was the inflection point then low cost launch even is another inflection point that everybody here should be thinking about you know, like with starship right? That’s another inflection point. One starship is proven. It’s not if it’s win. Um, so sat the next. Inside I had is satellite communications by far the biggest opportunity in in the satellite industry satellite communications is 10 times bigger than remote something as a satellite. So I so I just decided focus on on communications you know I’d spent a lot of time with a team for a couple. Couple years looking at various opportunities and it’s a multitrillion dollar industry communications. 1 subset of communications is mobile wireless. There’s there’s cable and fixed wireless and other things but mobile wireless is a trillion dollar industry just on it own. So we then focus on that and then the third thing insight that I did is most people and if you study Clayton Christensen’s theories of disruptive innovation. He’ll talk you know most people try to do lower cost versions of what things they already know right.
Charles Miller
Planet was lower cost remote sensing and you can put up enough that you can line scan the planet every day. Great! Great idea. But there’s so many so many startups you can do or lower cost versions right? of of what you already know I I actually liked and Peter. Thiel actually said it best in 0 to 1 is finding secrets so I was looking for what I call the now called the visiicalc of satellites and what I mean by that is back in the 1970 s the there was a huge inflection point called personal computers. Um. Apple twos were coming off the assembly line in 1977 by Tens of thousands a month right? But these killer apps didn’t come till later so visicalc is one of those. It was invented two years later 1979 the first spreadsheet and and nobody. Done a spreadsheet before there’s a whole new use case for the the personal computer user that what just hadn’t been around and so I was like let’s find the the thing that’s a whole new use case that solves a problem for people by this inflection point for small satellites. Took us several years and we we came up on sat the phone but it was really a discovery process so you can say we invented a lot of this but in a lot of ways we discovered it. We discovered that conventional wisdom was wrong.
Charles Miller
That you could connect a satellite directly to a standard phone both ways right? and and so that is what you want to look for you. Want to find something where conventional wisdom is wrong and this is the hard part. Someone’s going to tell you that can’t be done. You really need to go to first principles about is that true. You need to challenge everything until you fundamentally understand it from first principles. So and so in 19 I’m sorry in 2014 late to 2014 I had 1 of. My team come to me and say hey can you connect a satellite direct to phone. This would be really cool. You know you could do lots of things to be very valuable in one of my my lead technical team. He’s now co-founder with me ty spidel. He said there’s no way you can connect a satellite to a phone. And so this is this is the key insight. You need to challenge that if it’s not obvious from first principle. So I said why? not and ty kind of grumbled at me and he said I’ll go do the link budget I’ll show you now one of the other in. Great. You know things that enabled this thi is a great solid satellite engineer but he knew nothing about mobile phones. But in today’s world that you can find this all on the internet so he would get on the internet find all the link margin.
Charles Miller
You know Inputs for mobile mobile phones that he needed to do the link budget and he put together and he came back next week you know, um you know this is the insight is like there’s huge amounts of information world about everything connecting the dots is the hard part tie connect to the dots and he came back and he said well I was wrong.
Charles Miller
We can connect a satellite two ways to a mobile phone now. Anybody else here can do the same thing right? This process it took us a couple years to find this. Ah we are just I you know we were just the ones to find it first right? and that you can connect the satellite directly to a phone now. We kept at this process.
Charles Miller
The the next focus on this discovery process is like okay you can connect a satellite to a phone both ways you know, but then it’s like well you have to add software in the phone you need to add your radio chip in the phone and I just held fast to like no those are too hard. We’re like. We are going to hold true to find no change to the phone can that be done I didn’t know it could be done. It took us 2 years how to figure out how to do it and what we had we finally figured out you could do spectrum sharing with the existing radio chips and phone how that would be done that was against conventional wisdom too. People said oh you can’t do that. You know all the spectrum regulatory experts. Say oh you’re not allowed to do that. Okay, well, you’re not allowed but that’s not written in the laws of the universe I can persuade regulators to you know if if long as we can’t do harmful interference to go to first principles of of space policy and law and regulatory. At first principle this says show you don’t cause harmful interference which a lot of you know experts forget about they don’t know policy and law. Well enough. So this is why you so you need to have somebody in your team and understands it deeply because you might miss out an opportunity if you don’t understand policy and law and then the third thing. Is tie then invented how you the doppler shifts and time delay solutions I described a little while earlier and that was the third breakthrough that was against conventional wisdom and so you could do this without any phones. So this process can be duplicated.
Charles Miller
By anybody you know on this on this show. That’s listening to this this. It can be replicated. You know by another entrepreneur and and it will be by some.
satsearch
Ah, fantastic. Thank you some some really interesting says there I Love the fact that one of your core capabilities early on was developed as a result of Thai trying to prove that it couldn’t be done. That’s fantastic. So yeah, it just shows the the balance needed in companies as well. People who.
Charles Miller
You need to go to first principles right? So I I learned cons everybody. It’s like the person who really proved this to everybody and going to first principles. Best better than anybody’s elon right? So I there’s a thing that Steve Jobs loved is.
satsearch
Can disprove hypotheses and people who yeah.
Charles Miller
You know, talked about you know paraphrasing Van Gogh that great artists feel right? so so I think great entrepreneurs. You know, look everywhere for trying to get smarter all the world. You know you know you have to assume you’re you’re messing up and you don’t know what you don’t know and you have to constantly constantly be learning. You need to be a learning machine and and once you think it, you know it all you’re dead right? You need to you. You have to you have to take on that you you know there’s you know the tip of the iceberg and you need to constantly be learning about and finding what you don’t know.
satsearch
Yeah, excellent. Thank you,? Great advice. Ah and um, sort of following on from this now at ah sat Search. We’re always very interested in thoughts and insights on on the state of the global supply chain. You know itself today. Ah, just for disclosure to Listeners. We have helped some. Ah. Ah, various engineers at Lynk find new products and and suppliers on the on the Sats Marketplace and with the the speed and the scale that Lynk is trying to achieve as far as I understand I would expect that your supplying chain management is something you have to plan and and manage pretty carefully. Wonder if you could share any experiences in this area.
Charles Miller
Well, absolutely so we have we’ve thought deeply about our supply chain strategy and and we have a unique well I wouldn’t say Unique. It’s a different perspective. Um, but supply chain is critical. It’s a huge risk. It’s this.. It’s a huge support. Source of cost but also schedule risk right and technical risk and everybody on in this on listening this is is. You know parts come and go they go you know and they create ah create schedule risk it creates technical risks I’m sure they have problems with customers or their suppliers who are are causing their risks. So we’re we’re we’re constantly you know. You know, working on this and and sensitive to this. You know we just you know we’ve had battery chargers chips. You know, come and go we have to totally redesign the battery Charger. So This is our thinking. So First of all from our our.
Charles Miller
Our thoughts here and this comes goes back to first principles is from a supply chain perspective to build this system. You know our first insight is everybody wants broadband you know everywhere voice and data everything you’re on your phone you want to do it everywhere so our whole strategy is to.
Charles Miller
Build out to that. That’s a long-term vision. We’re going to get there step by step. We’re going to crawl walk run there but we need to start with the end in mind right? like that. That’s where we’re getting to so you know and and if you do if you do the work we need to build 5000 satellites or more. Right? So we’ve applied for five Thousand satellites with with through the Itu and that’s our instate that we’re designing to that means mass producing satellites. We’re planning to build you know and launch 200 satellites a month once we ramp up production. Of our existing design. So. It’s like how do you get there? Well the first insight if you know the satellite industry most most of the suppliers in the industry you know are not set up for mass production of satellites. This is a supply chain issue and and so the next thought was.
Charles Miller
And there’s multiple ways of doing this one was what 1 web did with Airbus and outsourced the satellite production. Another is what planet and Spacex did they vertically integrated and we looked at both and so we haven’t 100% made it. But. We. We think there’s a lot of advantages of verical integration of of at least you know integrating the satellites and maybe even producing some of the subsystems ourselves. Um and and and the inside here is I would have to pay somebody I’d have to raise a ton of.
Charles Miller
Of Investor Capital and then go pay somebody to build a capability and learn how to math produce a subsystem if I’m going to do that You know maybe I should have a bias to you know, teaching myself how to do it right? rather than paying someone else. How to do the R and D and scaling up and it and that creates a lot of risk to us. So We have a a bias to vertically integrating this. We have a bias using Cots parts that are mass-producd and and finding low-cost ways to do things and so if a battery charger chip is out. It’s because there’s another battery recarger chip on the market and you can redesign the the battery charger to use the new chip and so you you create Mitigate supply chain risk there if you leverage commercial parts you verly integrate you can you know?? Um, the bill of materials.
Charles Miller
You know, looking going across the industry. We didn’t just jump to vertically integrated we we talked to a lot of people and have given people the opportunity to win our business with satellites themselves. We we got. We had lots of quotes on this that you know based on the research. You know for our existing satellite. You know it’s pretty clear that the vendors out there were charged us about $10000000 to build our small satellites which is a brand new design. It’s a 1 by one meter by about fifteen Centimeter phase array antenna satellite system and probably $10000000 but our bill in materials for that is about slightly under $200000 and and so we’ve we’ve have deep insights in what what is the most expensive parts of the satellite because we started building them ourselves because we decided we need to be on a path either. To be a very good customer of satellites or to build and you know, integrate our own and so we’ve lowered a lot of cough it gives us a lot of flexibility but we still buy a lot of parts and and some subsystems from other from ah suppliers around the world and.
Charles Miller
And we’re going to need a a very you know supportive supply chain to get to get to mass production of two hundred a month right so you know there’s ah you know 4 reaction wheels on every satellite. So one of the insights here. We brought reaction wheels in-house and the quotes on reaction wheels for our needs were about 25 to $30000 a wheel and we’ve figured out how we can build the wheels for about $1000 a wheel right? and and we’ve proven that out and we brought batteries in-house. 4 batteries about $15000 a battery. We got the cost of batteries under $100000 now we buy. We just buy many more so things at the component level than at the integrated subsystem level. Um, and so we look across that now. There’s some.
Charles Miller
You know there’s a variety of subsystems where we we are out purchasing. We’re currently buying thrusters from Don Aerospace that was announced Don announced that we did an rfp of 29 different thruster companies in the world. Some of the year audience probably responded I think we had 18 or 19 companies respond to our our Rp and and Don was the best so we selected Don Aospace so we will do a make versus buy. Analysis across all the subsystems and the answers could change over time right? So who knows what somebody might stand up something that really meets our needs and and does a great job and and we become a customer.
satsearch
Exon All those.? Ah yeah, thank you for being so open about about the supply chain and what you’ve ah gone through earlier like I think that’s great and yeah, the the make versus by decision is ah is a key one for anybody at the satellite level. So um, yeah, really interesting to to hear that from you. Thank you? Um I’ve. I Think we can just about wrap up charles in a sec I think um, you’ve shared some really useful information for our readers here I just wondered. Finally if you could just share a bit about your about the future here the near the near Future. You know what? what your expectations are for the to bring it back to the topic to the for the sattaphone sector and. What changes do you see the industry going through and what are you most excited about at Lynk for the future.
Charles Miller
Well the sat the phone sector is now very excited a few years ago everybody thought we were crazy right? Oh you can’t do that and and you know that was great because until we you know provided empirical proof around the world that you could do it.
Charles Miller
You know and that happened about a little over a year ago and now everybody’s dumping in and same me too. So we’re the category creator. We invented this category where the world’s only proven satellite directora standard phone operator. You know we have the patents. We have the old world’s only commercial license. We have the world’s only 3 commercial satellite direct to cell towers in space that connect to standard phones. So but there’s bunch of people jumping in and we knew this is going to happen. So this is a really hiding sector.
Charles Miller
Um, because it solves such a big problem and I I think everybody listening to this this is an opportunity to be on somebody’s team if not more more than 1 theme. Um, this is going to grow to be the largest category in satellite.
Charles Miller
Me say that again. This is going to grow to be the largest category in satellite and it goes back to what I said earlier it solves a problem for billions of people and it’s there’s 3 categories of services that solve a problem for satellite services for for billions people.
Charles Miller
The other two are weather and and and Gps and nobody pays for those. This is the one multibillion dollar customer service that uses satellite services that people will pay for right.
Charles Miller
And so it is going to grow to be the biggest category in satellite and so um, the insight here is is Lynk is going to start providing commercial services later this year. We believe we have a 2 to 3 year head start before anybody else starts providing commercial services. We think it’s 2 to 3 years before anybody who we we take seriously um, actually tests um, satellite directtophone and then it’ll be another year after that where they are operational right? And so.
Charles Miller
You know this is a exciting category There’s not going to be There’s going to be multiple winners Lynk is not going to be the only winner we yes we have a couple year head start and that’s great for us. But you know the mobile wireless industry doesn’t like monopolies. Um, m and o’s will make sure there are competitors right? Apple invented the smartphone right? What did the m and o do they made sure. There’s a competitor they brought Android on so quick right to make sure that Apple had no monopoly over the m and o’s.
Charles Miller
You know that if you look across industry. It’s like base stations right? You got huawei ericsson and Nokia. no no monopoly if you look at cell towers in your country. They have multiple competitors in ah in the United States it’s crown castle an american tower who. Who beat each other up for getting m and o business so they will make sure there’s there’s at least 2 maybe there’s 3 winners and so that’s how I see this industry playing out there. It’s going to be 2 to 3 winners and another structure thing going back to your question is There’s there’s some companies that are getting into low data rate messaging in the near term but those won’t be successful with the long-term when you bring on the much higher data rate services that allow you to do broadband and voice everywhere directly to your phone. Those low data rate services will melt away. Um, so they’re they’re they’re cool and innovative but going back to 1 of the advantages of looking at this going back 13 years is is yes you can do a cool hack with existing existing hardware. It’s already in space. But it’s very limited. This goes back to the insight that you’ve probably heard many times form follows function. Well in those cases they they had function. You know had form form. You know function, you know, ah followed form.
Charles Miller
Form was existing satellites in space and this said what can we do with that. You can do some things but it’s very limited and so and those are hacks. But and they’ll they’ll be cool for a few years. But once the follow on systems come on and this goes back to what I said very early.
Charles Miller
Dropping the satellites in low Leo where you get much more speed and much more capacity for every unit of spectrum ah is is how you get broadband rectophone everywhere on the planet if you’re using Geo or high Leo. You know those. You know those systems don’t work very much longer, right? They’re they’re a short-term you know band-aid and and they’ll be good money for those companies but they don’t they get disrupted by the company that can get to the big broadband low Leo. And first.
satsearch
Brilliant. Well thank you Charles that’s a great place to wrap up and ah yeah, would like to say thank you very much for sharing all those great insights with us being so open about Lynk’s business and the sp supply chain and the history and the development and I think it’s ah it’s fascinating. You’ve got obviously a very yeah. Clear story to tell as a business and yeah from sats search aside you would like to wish you best luck moving forward and thank you again.
Charles Miller
Thank you Al and I look forward to hearing from your audience and and hopefully this this is takes a village to connect the world and I look forward to to. Being part of this service with with everybody you know in the industry you know, helping us bring this, you know to every you know to several billion people.
satsearch
Excellent. Thank you and yeah to all our listeners out there. Thank you very much for spending time with us today on the space industry podcast we’ll share more information and some links and resources about Lynk in the in the show notes and if you have any questions for the company. There’ll be a way you know way to wait to direct them to them as well. Hope you enjoyed the conversation I certainly did I feel like there’s a whole load more different topics. We could talk about um, but yeah, just would say. Thank you again? Charles and thanks to everybody for listening.
Charles Miller
Thank you!