The challenge of positioning a brand for aspirational, moonshot market categories
Seventeen months after the demo day presentation for its space-based data centers, Starcloud raised a $170 million Series A — valuing the Y combinator unicorn at $1.1 billion. It’s a business model with undeniable potential, but one skeptics are happy to poke black hole-sized, well, holes in.
In the funding announcement, Starcloud CEO and founder Philip Johnston is confident it will be “…the first orbital data center that is cost-competitive with terrestrial data centers, with costs on the order of $0.5 per kw/hour of power — if commercial launch costs land around $500 per kilogram.
How soon the Starlink satellites will be flying regularly on, in this case, SpaceX spacecrafts is difficult to predict. And while the PR challenge is exponentially smaller than the feat of actually deploying distributed data, it requires a nuanced approach when aspirational technology is in play.
Flashback roughly 20 years. I’m PR repping a startup that had developed and was deploying Broadband over Power Lines (B.P.L.) technology. While the idea wasn’t fantastical or far-fetched – utility companies in Europe had offered high-speed Internet service to consumers over power lines for years – it was quite novel in the U.S. and required some market credibility building.
The client actually was getting a lot right in building a business and marketing strategy; it had trials underway with utilities in cities like Cincinnati we were able to build high-impact media narratives around (including this New York Times article); there was strong data showing cost advantages to consumers compared to traditional Internet options; and they even set up the technology in a suburban house outside Washington, DC we could use to demonstrate it in a realistic environment to media, investors, prospects and consumers.
A strong narrative was built around “why now”, notably that the costs of home adapters and equipment required on telephone poles became more affordable. It also played into a broader and emerging “smart home” narrative, as B.P.L. allowed utilities to tap data signals to quickly spot power outages as well as monitor each home’s electricity use.
As you’ve probably surmised, B.P.L. never quite went mainstream for a variety of reasons I won’t bore you with, but it came to mind as I read more and more about how polarizing the concept of “space based data centers” have become.
SpaceTech PR For Moonshots
Gartner VP analyst Bill Ray recently referred to space-based data center aspirations as ‘peak insanity,’ echoing similar denunciations of late from OpenAI CEO Sam Altman and noted short seller Jim Chanos.
There are far smarter people than me to opine on if and when space data centers will be orbiting above us in LEO. Could be years, could be decades, could be never. But SpaceTech innovators have pushed through naysayer noise before, and it’s an instructive example of how established government contractors, neoprimes, startups and scaleups can think about public relations campaigns for these types of ambitious endeavors.
Using space-based data centers as the case study, here are strategies for defense tech startups and scaleups to consider when building a PR program for highly disruptive projects and missions.
Let larger brands bear burden of validating market
Startups and scaleups must be clever and focused in validating aspirational business pursuits. It can be cost and resource-prohibitive to try and establish yourself as brand ambassador to validate an nascent market.
With space-based data centers, SpaceX, Blue Origin and a handful of startups have publicly stated they are designing solar-powered satellite constellations able to work around the aforementioned power constraints and to provide on-orbit, high-performance computing, bypassing Earth’s power constraints.
And as DataCenterDynamics recently reported, Elon Musk’s SpaceX has proposed launching one million data center satellites. Other names active in these conversations include Amazon Leo, Blue Origin, Google through Project Suncatcher, as well as Axiom Space, NTT, Ramon Space, and Sophia Space. So there is forward movement with marquee names that will command attention and, at least for now, credibility.
Market education is fine, but bearing the full weight of the entire category is often prohibitively expensive and layered with risks. If you take a category such as space data centers that are being chased by deep-pocketed, highly visible companies and visionaries, it isn’t necessary or advised.
Instead, laser focus on validating the piece of the market your technologies and products solve. Step one is establishing the challenge as a primary one that needs to be solved, and then support your approach through data-driven thought leadership, third-party validation and visual demonstrations that will resonate. With space-based data centers and other moonshot categories, it is unlikely you will be able to point to a “like” project that confirms your solutions will work in an untested environment. But you can, to grab an advertising term, identify “lookalike” use cases that are credible.
Don’t push out a solution in search of a problem
Innovators pursuing space-based data centers have the luxury of being able to tell a rather straightforward “why” story. And it’s not a story about what will happen 10 years from now, it’s already happening. AI energy consumption is creating unsustainable power, cooling, and infrastructure challenges that threaten to strain terrestrial power grids and spike costs for consumers and businesses. Space-based data centers answer a very tangible and present challenge: exploding AI energy demands that may be difficult to meet here on earth.
Will Marshall, chief executive of satellite operator and builder Planet Labs recently noted that “ Taking resource-intensive infrastructure off Earth has been an idea for years, but it has required launch and satellite costs to come down. We are nearing that point.” It has been reported that early next year Google and Planet Labs aim to deploy two test satellites into orbit carrying the tech giant’s AI chips, a Google described “moonshot project” to deploy a network of satellite data centers at scale.
So the space-based data center solution is a response to a very real and growing problem. But for startups and scaleups in other “moonshot” categories, it is equally critical to clarify that problem and make the vision language specific and repeatable. Stakeholder audiences are unlikely to invest – financially or emotionally – in a problem that may pop up twenty years from now. Clarity on urgency is critical.
Don’t try and address every conceivable obstacle
Ray at Gartner bluntly stated in his recent commentary the following: “Companies are wasting money by pouring funds into the orbital datacenter ‘bubble’ because the economics do not work. This is due to the prohibitive costs of launching hardware and the immense technical challenges of cooling these orbital data centers in the vacuum that is space.”
So yes, space-based data center problems, we’ve got a few. But if a startup/scaleup tries to shoot down every conceivable obstacle, the market will likely end up shooting the messenger. It’s a fool’s mission.
Engineering hurdles, the volume and costs of satellites needed, the cost of training large language models, performance concerns, terrestrial easing of power constraints, the list goes on and on. Each hurdle on its own is significant enough to prevent space-based data centers from becoming a reality.
Just to pick out a couple of these in more detail: Google executive Travis Beals recently estimated it could take 10,000 satellites to recreate the compute capacity of a gigawatt data center, assuming 100-kilowatt satellites. The costs to train LLMs in space? Well, some guidance was provided by aerospace engineer Andrew McCalip, who said his initial rough calculations a few years ago “…suggested that data centers in space would cost in the range of 7 to 10 times more, per gigawatt of capacity, than their terrestrial counterparts.”
Focus on a defined challenge or narrow set of challenges your startup or scaleup is addressing. This can work a couple different ways from a PR perspective. One proven strategy is to reframe popular assumptions about what the most significant hurdles are.
John David Callison with Abelian Security Council and Joseph Minafra at SSERVI at NASA Ames Research Center did a nice job of that with a recently co-authored guest article in SpaceNews titled “Hardware is no longer the problem holding back space-based data centers — the supply chain is.”
Messages like this can cut through because they aren’t piling on to the prohibitive engineering and launch economics bandwagon – a message that would likely get lost in the noise. Instead the authors focus on a less-covered obstacle: the absence of a procurement and logistics architecture capable of sourcing, qualifying, transporting, assembling and sustaining the technologies these systems require. Is this challenge number one? Debatable, but they lock in on something a brand can own, if desired.
If you are a defense tech or enterprise tech startup or scaleup disrupting markets with innovative solutions, reach out to contact@lustigstrategies.com to see if PR and thought leadership can position your brand for current and future growth, investment, and success.
